The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:

Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 120,000 copies and by the Operations Department was 380,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Operations Department?
A) $65,100
B) $68,600
C) $64,140
D) $67,640

Question

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year:

Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 120,000 copies and by the Operations Department was 380,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Operations Department?
A) $65,100 
B) $68,600 
C) $64,140 
D) $67,640

Quizplus · Accepted Answer

[(310,000) / (90,000 + 310,000)) × $64,000] + (310,000 × $0.05) = $65,100

The Charmatz Corporation Has a Central Copying Facility