Triton Company\'s copy department, which does almost all of the photocopying for

Question

Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of copies: Salaries (fixed) $90,250 Employee benefits (fixed) 10,000 Depreciation of copy machines (fixed) 10,000 Utilities (fixed) 5,000 Paper (variable, 1 cent per copy) 50,000 Toner (variable, 1 cent per copy) 50,000 The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy. Assuming the following copies were made during the year, 2,867,500 for sales and 2,787,000 for administration, calculate the copy department costs allocated to sales. Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of copies: Salaries (fixed) $90,250 Employee benefits (fixed) 10,000 Depreciation of copy machines (fixed) 10,000 Utilities (fixed) 5,000 Paper (variable, 1 cent per copy) 50,000 Toner (variable, 1 cent per copy) 50,000 The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy. Assuming the following copies were made during the year, 2,867,500 for sales and 2,787,000 for administration, calculate the copy department costs allocated to sales.

Explanation / Answer

Sl. No. Nature of expenses Total Cost ($) Proportion to Sales Department Costs to sales department ($) 1 Salaries           90,250 40%                36,100 2 Employee benefits           10,000 40%                   4,000 3 Depreciation of copy machines           10,000 40%                   4,000 4 Utilities             5,000 40%                   2,000 5 Paper           50,000 2 cent per copy                57,350 6 Toner           50,000 2 cent per copy                57,350 Total        215,250              160,800

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