The Document Creation Center (DCC) for Arlington Corp -
If DCC Uses a Dual-Rate for Allocating Its Costs

question 10

Multiple Choice

The Document Creation Center (DCC) for Arlington Corp. provides photocopying and document services for three departments in the Minneapolis office. The following budget has been prepared for the year.
$\begin{array}{lr}\text { Available capacity } & 8,000,000 \text { pages } \\\text { Budgeted usage: } & \\\text { Software Development } & 1,600,00 \text { pages } \\\text { Training } & 3,000,00 \text { pages } \\\text { Management } & 2,400,000 \text { pages } \\\text { Cost equation } & \$ 280,000+\$ 0.03 \text { per page }\end{array}$
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If DCC uses a dual-rate for allocating its costs, how much cost will be allocated to the Management Department, assuming the Management Department actually made 2,100,000 copies during the year?

• A) $147,000.
• B) $136,500.
• C) $159,000.
• D) $150,761.

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Definitions:

Making Concessions

The act of yielding or compromising on certain points or demands in a negotiation or disagreement.

Potential Agreement

A possible future agreement between parties outlining conditions that are satisfactory to all involved entities.

Good Faith

An honest intention to act without taking an unfair advantage over another party.

High Process Control

A situation where there is strict regulation and management of the procedures and methods utilized in production or in carrying out tasks.