Question

The Western and Pacific Railroad has two divisions, the Western Division and the Pacific Division. The company recently invested $8,900,000 to maintain its railroad track. Pertinent data for the two divisions are as follows: Total Miles Traveled: Western Division 890,000 miles Pacific Division 1,520,000 miles The amount of track improvement cost that should be allocated to the Western Division is: (Round intermediate calculation to 1 decimal place.)

Answer 1

The cost allocated to the Western Division is calculated by determining the cost per mile and multiplying it by the miles traveled by the Western Division. The calculated cost amounts to approximately $3,288,194.

Step-by-step explanation:

To calculate the amount of track improvement cost allocated to the Western Division, we need to divide the total cost by the total miles traveled by both divisions and then allocate the costs based on the miles traveled by the Western Division.

First, let's find the cost per mile:

Total cost = $8,900,000

Total miles traveled by both divisions = Western Division miles (890,000) + Pacific Division miles (1,520,000) = 2,410,000 miles

Cost per mile = Total cost / Total miles traveled = $8,900,000 / 2,410,000 miles ≈ $3.6946/mile

Next, we calculate the cost allocated to the Western Division:

Cost allocated to Western Division = Cost per mile * Western Division miles = $3.6946/mile * 890,000 miles ≈ $3,288,194

Round off the intermediate cost per mile to one decimal place as per the instruction.