If 800,000 documents are printed during 2011, 320,000 documents for the Executive Department and 480,000 documents for the Administrative Department, calculate the costs allocated to the Executive Department.

Check Company has several departments. One of those departments does only printing work for other departments of Check Company, and that department expects to print 1,000,000 documents for other departments at Check Company, and in producing those documents, expects to incur the following costs:

 

 

 

Salaries (fixed)	$12,000
Employee benefits (fixed)	$3,000
Depreciation (fixed)	$3,000
Utilities (fixed)	$1,000
Printing supplies (1 cent per document)	$20,000

 

 

 

Costs are assigned to two cost pools, fixed costs and variable costs. The costs are then assigned to the Executive Department and the Administrative Department at Check Company. Fixed costs are assigned on a lump-sum basis, 30% to the Executive department and 70% to the Administrative Department. The variable costs are assigned at a rate of $0.02 per document printed.

 

 

 

If 800,000 documents are printed during 2011, 320,000 documents for the Executive Department and 480,000 documents for the Administrative Department, calculate the costs allocated to the Executive Department.

 

 

 

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