Fenway Telcom has three divisions, commercial, retail, and consumer, that share

Question

Fenway Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $600,000. You have been provided with the following information for the upcoming year:

What is the allocation rate for the upcoming year, assuming Fenway Telcom uses the single-rate method and allocates common costs based on the time on the network?

Fenway Telcom has three divisions, commercial, retail, and consumer, that share the common costs of the company's computer server network. The annual common costs are $600,000. You have been provided with the following information for the upcoming year:

Explanation / Answer

The allocation rate for the year is as follows:

=Common annual costs/Time on network

=600,000/200,000

=$3 per hour

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