A company has two departments, A and B that incur delivery expenses. An analysis

Question

A company has two departments, A and B that incur delivery expenses. An analysis of the total delivery expense of $9,000 indicates that Dept. A had a direct expense of $1,000 for deliveries and Dept. B had no direct expense. The indirect expenses are $8,000. The analysis also indicates that 60% of regular delivery requests originate in Dept. A and 40% originate in Dept. B. Departmental delivery expenses for Dept. A and Dept. B, respectively, are

Explanation / Answer

60% of $8000 = $4800 40% of $8000 = $3200 Assuming that the indirect expenses are proportional to the delivery requests => Overall expenses for dept. A = $4800 + $1000 = $5800 => Overall expenses for dept. B = $3200 + $0 = $3200

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