Strongsville College recently leased a photocopy machine for $2,000 per month plus $0.04 per copy.Additional variable operating costs were $0.02 per copy.Strongsville College estimated it would produce 30,000 copies per month.The Accounting Department estimated it would produce 6,000 copies, but actually produced only 4,000 copies.If fixed and variable cost pools are allocated separately, then the amount of fixed costs allocated to the Accounting Department should be _____.
A)$240
B)$360
C)$400
D)$200

Question

Quizplus · Accepted Answer

The fixed cost of leasing the photocopy machine is $2,000 per month, which is independent of the number of copies made. Therefore, the allocation of fixed costs to any department should be based on some predetermined basis, not on the actual number of copies made. Since the question does not provide a specific allocation basis, we cannot accurately calculate the fixed cost allocated to the Accounting Department based on the information given. However, the fixed cost of $2,000 remains constant regardless of the number of copies produced.

Strongsville College Recently Leased a Photocopy Machine for $2,000 Per