The Charmatz 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 300,000 to 500,000 copies:
| Fixed costs per year | $66,000 |
| Variable costs | 5 cents (0.05) | per copy |
Budgeted long-run usage in copies per year:
| Marketing Department | 110,000 | copies |
| Operations Department | 390,000 | copies |
Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Marketing Department was 120,000 copies and by the Operations Department was 360,000 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.
◦ $69,000
◦ $117,000
◦ $70,980
◦ $69,480
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