The Charmatz Corporation Marketing Department and the Operations Department The

Question

The Charmatz Corporation Marketing Department and the Operations Department The following data apply year has a central copying facility The copying facility has only two users, the to the coming budget Budgeted costs of operating the copying facility for 300,000 to 500,000 copies Fixed costs per year Variable costs $69,000 3 cents (03) per copy Budgeted longminus-run usage in copies per year Marketing Department Operations Department 100,000 360,000 copies copies Budgeted amounts are used to calculate the allocation rates Actual usage for the year by the Marketing Department was 70,000 copies and by the Operations Department was 330,000 copies. If a singleminus-rate costminus-allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department? Assume actual usage is used to allocate copying costs. (Do not round interim calculations and round the final calculation to the nearest dollar.)

Explanation / Answer

Answer:

Fixed cost allocation = (100000 / 460000 ) * 69000 = $15000

Variable cost allocation = 100000 * 0.03 = $ 3000

Total Cost = $ 15000 + $ 3000 = $ 18000

Cost per copy = $ 18000 / 100000 = $ 0.18 per copy x 70000 = $ 12600

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