Consequence Printing operates a Graphics business at two different locations. Consequence Printing has one support department that is responsible for cleaning, service, and maintenance of its printing equipment. The costs of the support department are allocated to each Graphics Center on the basis of total prints made.
During the first month, the costs of the support department were expected to be $100,000. Of this amount, $30,000 is considered a fixed cost. During the month, the support department incurred actual variable costs of $64,000 and actual fixed costs of $36,000.
Normal and actual activity (prints made) are as follows:

a. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 1.
b. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 2.
c. Calculate the support department costs not allocated to the two Graphics Centers.

Question

Consequence Printing operates a Graphics business at two different locations. Consequence Printing has one support department that is responsible for cleaning, service, and maintenance of its printing equipment. The costs of the support department are allocated to each Graphics Center on the basis of total prints made.
During the first month, the costs of the support department were expected to be $100,000. Of this amount, $30,000 is considered a fixed cost. During the month, the support department incurred actual variable costs of $64,000 and actual fixed costs of $36,000.
Normal and actual activity (prints made) are as follows:
  
a. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 1.
b. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 2.
c. Calculate the support department costs not allocated to the two Graphics Centers.

Quizplus · Accepted Answer

The Answer of Consequence Printing operates a Graphics business at two different locations. Consequence Printing has one support department that is responsible for cleaning, service, and maintenance of its printing equipment. The costs of the support department are allocated to each Graphics Center on the basis of total prints made.
During the first month, the costs of the support department were expected to be $100,000. Of this amount, $30,000 is considered a fixed cost. During the month, the support department incurred actual variable costs of $64,000 and actual fixed costs of $36,000.
Normal and actual activity (prints made) are as follows:
  
a. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 1.
b. For purposes of performance evaluation, calculate the fixed costs allocated to Graphics Center 2.
c. Calculate the support department costs not allocated to the two Graphics Centers.

Consequence Printing Operates a Graphics Business at Two Different Locations