The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $7,100,000 to maintain its railroad track. Pertinent data for the two divisions are as follows: Total Miles Traveled: Western Division 710,000 miles Pacific Division 1,110,000 miles The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 1 decimal place.)

Question

Kendall Frye

Business

7 January, 00:11

The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $7,100,000 to maintain its railroad track. Pertinent data for the two divisions are as follows: Total Miles Traveled: Western Division 710,000 miles Pacific Division 1,110,000 miles The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 1 decimal place.)

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Xander · Answer 1

Cost allocated to Western Division = $2,769,780.22

Explanation:

The track improvement cost should be fairly allocated to the divisions using the miles traveled as basis.

Total miles traveled = 710,000 + 1,110,000 = 1,820,000

Cost allocated to Western division = (710,000/1820,000) * 7,100,000

= $2,769,780.22