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

Multiple Choice

Derico 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 $42 per shipment.The Logistics Department's fixed costs are budgeted at $365,800 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 $388,800 and fixed costs totaled $378,080.The Atlantic Division had a total of 4,700 shipments and the Pacific Division had a total of 4,300 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) $23,080
B) $0
C) $12,280
D) $10,800