Question :

AC Consulting Company has purchased a new $15,000 copier. This overhead cost may be shared by the purchasing, information technology and accounting departments since those are the only departments which may be able to access the machine. The company has decided to assign the cost based on the number of copies made by each department. The copier is estimated to give 1 million copies over its life. Each department has estimated the number of copies which can be made in their department over the life of the copier.

Department

Copies

Purchasing

350,000

Accounting

200,000

Information Tech

400,000

How much overhead may be allocated each time a copy is made if cost allocations are computed to 4 significant digits?