Question

Actual usage for the year by the Marketing Department was​ 90,000 copies and by the Operations Department was​ 360,000 copies. If a dualminus−rate costminus−allocation method is​ used, what amount of copying facility costs will be budgeted for the Operations​ Department? A. ​$68,600 B. ​$67,640 C. ​$64,140 D. ​$65,100

Answer 1

$34800

Step-by-step explanation:

The question is not complete, let us assume Fixed costs per year $30,000

Variable costs 3 cents (.03) per copy.

The dual rate cost allocation method uses two costs which are: fixed costs and variable costs. This method uses each cost to calculate different allocation rate, this leads to more precise cost allocations.

Given that the usage by the Marketing Department was​ 90,000 copies and by the Operations Department was​ 360,000 copies.

The total copies used = 90000 + 360000 = 450000 copies.

The amount of copying facility costs budgeted for the Operations​ Department = [fixed costs × (operation department copies/total copies)] + [variable costs × operations copies]

Budgeted cost for operations department = [$30000 × (360000/450000)] + [0.03 × 360000] = $24000 + $10800 = $34800