If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations 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 dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Assume budgeted usage is used to allocate fixed copying costs and actual usage is used to allocate variable copying costs.

a. $30,245

b. $29,945

c. $28,500

d. $28,200

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

a. $28,500

b. $28,200

c. $30,245

d. $29,945

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If a single-rate cost-allocation method is used, what amount of copying facility costs will be allocated to 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 allocated to the Marketing Department? Assume actual usage is used to allocate copying costs.

a. $8,400

b. $9,000

c. $6,000

d. $4,800

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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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Benefits of the dual-rate method include

ACCOUNTING

Multiple Choice

Benefits of the dual-rate method include

a. variable costs that are transformed into fixed costs for user decision making.

b. the low cost of implementation.

c. avoidance of expensive analysis for categorizing costs as either fixed or variable.

d. information that leads to outsourcing decisions that benefit the organization as a whole.

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Benefits of the single-rate method include

ACCOUNTING

Multiple Choice

Benefits of the single-rate method include

a. the low cost of implementation.

b. fixed costs that are transformed into variable costs for user decision making.

c. signals regarding how variable and fixed costs behave differently.

d. information that leads to outsourcing decisions that benefit the organization as a whole.

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When using the single-rate method, fixed cost allocation may be based on

ACCOUNTING

Multiple Choice

When using the single-rate method, fixed cost allocation may be based on

a. actual usage

b. budgeted usage

c. incremental cost allocation

d. either (a) or (b)

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