Reference no: EM132850928
Question - The Clinton 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 4,500,000 copies:
Salaries (fixed) $90,000
Employee benefits (fixed) 11,250
Depreciation of copy machines (fixed) 9,000
Utilities (fixed) 4,500
Paper (variable, one cent per copy) 45,000
Toner (variable, one cent per copy) 45,000
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 4,290,000 copies were made during the year, 2,250,000 for sales and 2,040,000 for administration, calculate the copy department costs allocated to sales and administration.
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