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:

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, 2,865,000 for sales and 2,446,500 for administration, calculate the copy department costs allocated to sales.

Explanation / Answer

Salaries 82,250 Employee Benefits 10,000 Depreciation 10,000 Utilities 5,000 Total Fixed Cost 1,07,250 Amount Allocated to Sales Dept. @40% 42900 Amount Allocated to Admin. Dept. @60% 64350 Amount allocated to Sales Department Particulars Amount Fixed Cost 42,900 Variable Cost (2865000*0.02) 57,300 Total Cost 1,00,200

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