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

Multiple Choice

Erholm 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 $31 per shipment.The Logistics Department's fixed costs are budgeted at $411,800 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 $290,700 and fixed costs totaled $431,950.The Atlantic Division had a total of 3,900 shipments and the Pacific Division had a total of 5,100 shipments for the year.How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

A) $391,453
B) $425,770
C) $445,498
D) $409,502