If a single-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department

ACCOUNTING

Multiple Choice

The Bonawitz 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 costs of operating the copying facility

for 200,000 to 300,000 copies:

Fixed costs per year $30,000

Variable costs 3 cents (.03) per copy

Budgeted long-run usage in copies per year:

Marketing Department 60,000 copies

Operations Department 190,000 copies

Budgeted amounts are used to calculate the allocation rates.

Actual usage for the year by the Marketing Department was 40,000 copies and by the Operations Department was 180,000 copies.

If a single-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department?

a. $9,000

b. $1,800

c. $7,200

d. $8,400

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