Gretter Corporation Has Two Operating Divisions--An Atlantic Division and a Pacific

Multiple Choice

Gretter Corporation has two operating divisions--an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $36 per shipment.The Logistics Department's fixed costs are budgeted at $399,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $305,040 and fixed costs totaled $418,680.The Atlantic Division had a total of 2,600 shipments and the Pacific Division had a total of 5,600 shipments for the year.For performance evaluation purposes,how much actual Logistics Department cost should NOT be charged to the operating divisions at the end of the year?

A) $28,920
B) $9,840
C) $19,080
D) $0