Ankeny College recently leased a photocopy machine for $1,500 per month plus $0.04 per copy.Additional variable operating costs were $0.02 per copy.Ankeny College estimated it would produce 30,000 copies per month.The Accounting Department estimated it would produce 6,000 copies, but actually produced only 5,000 copies.If fixed and variable-cost pools are allocated separately, then _____ is the amount of variable cost allocated to the Accounting Department:

Question

Quizplus · Accepted Answer

Variable cost per copy = $0.04 + $0.02 = $0.06

Total variable cost for 30,000 copies = 30,000 x $0.06 = $1,800

Variable cost per copy for Accounting Department = $0.06 x 5,000 = $300

Therefore, the amount of variable cost allocated to the Accounting Department is $300.

The correct answer is C.

Ankeny College Recently Leased a Photocopy Machine for $1,500 Per