Question

Pound Industries’ customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 7,000 calls and incurred costs of $203,000. If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to: $117,740. $29. $203,000. $0. $85,260.

Answer 1

Answer:

The correct answer is $117,740.

Explanation:

According to the scenario, the given data are as follows:

Total calls = 7,000

Whole sale operation calls = 2,940

So, Retail operation calls = 7,000 - 2,940 = 4,060

Total cost = $203,000

So, We can calculate the cost for retail operation by using following formula:

Cost for retail operation = Total Cost × Retail Calls ÷ Total calls

By putting the value, we get

Cost for retail operation = $203,000 × 4,060 ÷ 7,000

= $117,740