The Copy Department in the College of Business at State University provides phot

Question

The Copy Department in the College of Business at State University provides photocopying service for both the Marketing and Economics Department. The following budget has been prepared for the year.

  

  

If the Copy Department uses a dual rate for allocating its costs based on usage, how much cost will be allocated to the Marketing Department?

  Available capacity 13,000,000 pages   Budgeted usage:     Marketing 5,200,000 pages     Economics 2,600,000 pages   Cost equation $156,000 + $0.025 per page

Explanation / Answer

cost will be allocated to the Marketing Department=$156,000 + $0.025 per page

=$156,000 + $0.025 *5,200,000 pages=$286,000.

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