At Deutschland Electronics, there is a centralized office used for receiving or transmitting a large...
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Accounting
At Deutschland Electronics, there is a centralized office used for receiving or transmitting a large volume of enquiries by telephone. Currently, the two product lines are charged for call center support costs based on sales revenue (allocation base) Last year's summary of call center operations revealed the following:
Surveillance Products
Specialty Products
Number of calls for information
1,000
4,000
Average call length for information
3 minutes
8 minutes
Number of calls for warranties
300
1,200
Average call length for warranties
7 minutes
15 minutes
Sales revenue
$8,000,000
$5,000,000
Deutschland Electronics currently allocates call center support costs using a rate of 0.5% of sales revenue. Compute the amount of call center support costs that would be allocated to Surveillance Products.
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