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Service Department Charges The centralized employee Travel Department of Duden Company has expenses of $52,800. The...

Service Department Charges

The centralized employee Travel Department of Duden Company has expenses of $52,800. The department has serviced a total of 2,400 travel reservations for the period. The South Division has made 1,056 reservations during the period, and the West Division has made 1,344 reservations.

How much should each division be charged for travel services? Do not round interim calculations.

South Division $
West Division $

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Expert Solution

Answer)

Calculation of expense charged from South Division and West Division

Travel department expense per reservation = Total expense of travel department/ total number of travel reservations

                                         = $ 52,800/ 2,400 travel reservations

                                           = $ 22 per travel reservation

Allocation of expenses:

South division = Total travel reservations X expense per travel reservation

                           = 1,056 reservations X $ 22 per reservation

                          = $ 23,232

Therefore travel expense charged to south division is $ 23,232.

West division = Total travel reservations X expense per travel reservation

                           = 1,344 reservations X $ 22 per reservation

                          = $ 29,568

Therefore travel expense charged to west division is $ 29,568.

ekkarill92 answered 2 years ago
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