Giardin Outdoors is a recreational goods retailer with two divisions: Online and Stores. The two divisions both use the services of the corporate Finance and Accounting (F and A) Department. Annual costs of the F and A Department total $5.230 million a year. Managers in the two operating divisions are measured based on division operating profits.

The following selected data are available for the two operating divisions:

	Revenues ($000)	Transactions (000)
Online	$ 75,300	1,366.5
Stores	41,100	433.5

Required:

Determine the cost allocation if $3.830 million of the F and A costs are fixed and allocated on the basis of revenues, and the remaining costs, which are variable, are allocated on the basis of transactions.

Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar.

	online	stores
fixed
variable

Answer rating: 100% (QA)

To allocate the costs of the Finance and Accounting FA Department we need to follow the given alloca... View the full answer