Reference no: EM132639744
The Uli 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 4,887,900 copies:
Salaries (fixed)$103,400
Employee benefits (fixed)12,500
Depreciation of copy machines (fixed)9,900
Utilities (fixed)5,300
Paper (variable, 1 cent per copy)48,879
Toner (variable, 1 cent per copy)48,879
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.
Question 1: Assuming 4,687,900 copies were made during the year, 2,613,100 for sales and 2,074,800 for administration, calculate the copy department costs allocated to sales and administration.
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