The Copy Department in the College of Business at State

question 48

Multiple Choice

The Copy Department in the College of Business at State University provides photocopying services for both the Marketing and Economics Departments. The following budget has been prepared for the year.
$$\begin{array} { l c } \text { Available capacity } & 6,000,000 \text { pages } \\\text { Budgeted usage: } & \\\text { Marketing } & 3,600,000 \text { pages } \\\text { Economics } & 1,800,00 \text { pages } \\\text { Cost equation } & \$ 120,000 + \$ 0.025 \text { per page }\end{array}$$
-
If the Copy Department uses a dual-rate for allocating its costs, how much cost will be allocated to the Economics Department, assuming the Economics Department actually made 1,500,000 copies during the year?

• A) $77,500.
• B) $92,500.
• C) $132,500.
• D) $112,500.

---

Definitions:

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid according to the agreement.

Accounts Payable

The amount a company owes to suppliers for goods and services purchased with credit.

Factor

A finance company to which businesses sell their accounts receivable—usually for a percentage of the total face value.