Hanover and Trust, a Large Law Firm, Utilizes an Internal

question 140

Multiple Choice

Hanover and Trust, a large law firm, utilizes an internal centralized printing center to serve its three departments: Individuals, Corporate, Trust. The costs of the printing department include fixed costs of $69,190 and variable costs of $0.04 per page. Total estimated print pages are estimated to be 330,000 pages. Individuals are estimated to use 130,000; Corporate will use 165,000 and 35,000 from the trust area. Assuming a single charging rate is used, if the total pages printed were 340,000, which of the following statements is correct?

• A)The printing costs allocated to all departments would be $85,000.
• B)The printing department would expect to incur costs of $82,790.
• C)Any extra amount charged is due to the fixed costs being charged as if they were variable costs.
• D)all of the above.

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Definitions:

Matching Principle

An accounting concept that expenses should be recorded in the same period as the revenues they help to generate.