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 $14,000 indicates that Dept. A had a direct expense of $1,500 for deliveries and Dept. B had no direct expense. The indirect expenses are $12,500. 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:

$9,000; $5,000.

$8,550; $7,000.

$8,550; $5,450.

$7,000; $7,000.

$8,400; $5,600.

A company has two departments, A and B that incur delivery expenses. An analysis of the total delivery expense of $14,000 indicates that Dept. A had a direct expense of $1,500 for deliveries and Dept. B had no direct expense. The indirect expenses are $12,500. 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

As 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:

Dept A= 1500 + 12500*60%=$9,000 (Will Include $1,500 Direct Expenses also)

Dept B= 12500*40%=$5,000

Answer will be option A

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