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. Percentage of Peak Period Capacity RequiredBudgeted ShipmentsAtlantic Division 35% 1,900 Pacific Division 65% 5,200 ?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. $409,502
D. $445,498
Answer: B
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