Blue Inc.’s copy department does all of the photocopying for the marketing and human resources departments. Blue Inc. budgets the following costs for the coming year based on 5,000,000 copies:
Salaries and wages (fixed)
Employee Benefits (fixed)
Paper (variable $.01 per copy)
Toner (variable $.01 per copy)
The copy department’s costs are allocated to the marketing and human resources departments based on $.037 per copy.
If actual copies made are 4,800,000 what are the costs allocated to each department assuming the marketing department requested 2,500,000 copies and HR requested 2,300,000 copies.
What are the problems with using one allocation rate for the copy department’s costs?
Devise a better allocation system based on pooling costs. Show how the costs would be allocated based on your new system.
Present your computations in this Excel spreadsheet with the answer to each of the requirements on a SEPARATE TAB.
Are you looking for a similar assignment? Order now for an Amazing Discount! Use Discount Code “Newclient” for a 15% Discount!
accounting cost allocation .