Question

The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $7,000,000 to maintain its railroad track. Pertinent data for the two divisions are as follows:

Total Miles Traveled:

Western Division	700,000	miles
Pacific Division	1,100,000	miles

The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 1 decimal place.)

Answer 1

• All working forms part of the answer

A	Total Cost	$      7,000,000.00
B = 700000 + 1100000	Total Miles	1,800,000
C = A/B	Cost per mile	$                       3.90
D	No. of miles for Western Division	700,000
E = C x D	Amount of Track Improvement cost allocated to Western Division	$      2,730,000.00 = Answer

• Answer = $ 2,730,000