The Document Creation Center (DCC) for Alegis Corp. provides photocopying and do

Question

The Document Creation Center (DCC) for Alegis Corp. provides photocopying and document services for three departments in the St. Paul office. The following budget has been prepared for the year.

    

           

If DCC uses a dual-rate for allocating its costs, how much cost will be allocated to the Software Development Department, assuming the Software Development Department actually made 1,950,000 copies during the year?

  Available capacity 13,000,000 pages   Budgeted usage:     Software Development 2,600,000 pages     Training 4,875,000 pages     Management 3,900,000 pages   Cost equation $455,000 + $0.03 per page

Explanation / Answer

DCC uses a dual-rate for allocating its costs, first is the fixed costs per copy and other is the variable cost per copy.

Per copy fixed cost = 455000 /13000000 = $0.035

Cost will be allocated to Software Development Department actually made 1,950,000 copies during the year =

fixed cost (0.035 * 1950000) + variable cost (0.03 * 1950000) = $126750

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.