A Company has two divisions, one large and one small. They share the common costs...

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Accounting

A Company has two divisions, one large and one small. They share the common costs of the company's communication network. The annual common costs are $6,300,000. You've been provided with the following information for the coming year:

Calls Time on Network (Hours)

Large 300,000 380,000

Small 120,000 550,000

What is the allocation rate for the upcoming year, assuming A Company uses the single-rate method and allocated common costs based on the number of calls ?

A) 12.50

B) 10.00

C) 18.00

D) 15.00

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