Question

Triton 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 copies:

Salaries (fixed)	$86,500
Employee benefits (fixed)	10,000
Depreciation of copy machines (fixed)	10,000
Utilities (fixed)	5,000
Paper (variable, 1 cent per copy)	50,000
Toner (variable, 1 cent per copy)	50,000

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 the following copies were made during the year, 2,672,250 for sales and 3,026,500 for administration, calculate the copy department costs allocated to sales.

Round to two decimal places.

Your Answer:

Answer 1

Answer: calculation of Total fixed cost salaries (fixed) = $ 86,500 Employee benefits Efixed) - $ 10,000 Depreciation of copy machines (fixed) = $ 10000 utilities (efined) = $5,000 Total fixed cost - $ 111,500 Fixed costs allocated to Sales = $ 111,500 x 40% = $44,600 variable cost allocaled to sales = 26 79250 x$0.02 - $53,445 Total copy department costs allocated to Sales = fixed costs allocated + variable cost allocated. - $ 44,600 + $ 53,445 = $98045 - Total copy depostment costs allocated to Sales = $98,045