Baxter customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 16,300 calls and incurred costs of $454,770. Of these calls, 3,990 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are:

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Business

Yuliana Michael

19 May, 06:15

Baxter customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 16,300 calls and incurred costs of $454,770. Of these calls, 3,990 were for the company's wholesale operation; the remainder was for the retail division. Costs allocated to the retail division are:

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Amiah Macdonald · Answer 1

Cost allocated = $343,449

Explanation:

Giving the following information:

During a recent period, the department initiated 16,300 calls and incurred costs of $454,770. Of these calls, 3,990 were for the company's wholesale operation; the remainder was for the retail division.

First, we need to calculate the cost per call:

Cost per call = 454,770/16,300 = $27.9

Now, we can allocate to the retail division:

Number of calls = 16,300 - 3,990 = 12,310

Cost allocated = 12,310*27.9 = $343,449