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AC Consulting Company has purchased a new $18,038 copier. This overhead cost will be shared by the purchasing, accounting, and information technology departments since those are the only departments which will be able to access the machine. The company has decided to allocate the cost based on the number of copies made by each department. Each department has estimated the number of copies which will be made over the life of the copier.

Department Copies
Purchasing 250,000
Accounting 300,000
Information Tech 425,000

If cost allocations are computed to 4 significant digits and the purchasing department makes 58,000 copies this year, how much overhead will be allocated to purchasing?

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M968845

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