Question

Sampsons trucking company alligator the rent cost in dispatcher salary to their different serviced apartments on the basis of miles driven estimate cost in miles driven are summarized below rent equals $20,000 dispatch salary is $45,000 local delivery 620,000 miles long haul 1450,000 miles. Cost allegations are computed to forward significant digits. Result and values are rounded to the whole dollar. How much of the rent in salary cost will be alligator to the long-haul department

Answer 1

Allocation of Rent to Service departments:

Formula = Total Cost * Mile for the Department / Total miles

For Local Delivery: $20000*620000 miles/ (620000 miles+1450,000 miles) = $5990

For Long Haul: $20000*1450000 miles/ (620000 miles+1450000 miles) = $14010

Allocation of Dispatcher Salaries to Service departments:

For Local Delivery: $45000*620000 miles/ (620000 miles+1450000 miles) = $13478

For Long Haul: $45000*1450000 miles/ (620000 miles+1450000 miles) = $31522