Higuera Corporation Has Two Operating Divisions-A Consumer Division and a Commercial

Multiple Choice

Higuera Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Order Fulfillment Department provides services to both divisions. The variable costs of the Order Fulfillment Department are budgeted at $28 per order. The Order Fulfillment Department's fixed costs are budgeted at $280,800 for the year. The fixed costs of the Order Fulfillment Department are budgeted based on the peak period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $152,810 and fixed costs totaled $286,580. The Consumer Division had a total of 1,720 orders and the Commercial Division had a total of 3,460 orders for the year.
-How much actual Order Fulfillment Department cost should not be allocated to the operating divisions at the end of the year?

A) $0
B) $5,780
C) $13,550
D) $7,770