triton company\'s copy department, which does almost all of the photocopying for
ID: 2643312 • Letter: T
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) $90,750 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, 2,696,250 for sales and 3,228,000 for administration, calculate the copy department costs allocated to sales.
Explanation / Answer
Calculation of Copy Department costs allocated to Sales:
Calculation of Total Fixed Cost:
Fixed Cost assigned to Sales Department: 115,750 x 40% = $46,300
Calculation of Variable Cost for Sales:
Rate: 2 cents per copy.
Total Variable cost for Sales Department: 2,696,250 x 0.02 $ = $53,925
Total Cost Allocated to Sales: 46,300 + 53,925 = $100,225
Amount($) Salaries 90,750 Employee Benefits 10,000 Depreciation on Copy Machine 10,000 Utilities 5,000 Total 115,750Related Questions
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