Use the Following Information for the Next 4 Questions

question 67

Multiple Choice

Use the following information for the next 4 questions.
Arthur Henderson, LLC is a CPA firm that has a Printing Department that makes copies for its two operating departments, Audit and Tax. The Printing Department's budget for 2005 showed budgeted fixed costs of $40,000 plus variable costs of 2 cents per copy. At the beginning of 2005, the Audit Department budgeted its usage at 80,000 copies, and the Tax Department budgeted its usage at 50,000 copies. However, actual usage was 70,000 copies and 60,000 copies made by the Audit and Tax Departments, respectively.
-Under the single-rate method, what is the total budgeted costs for the Audit Department?

• A) $1,600
• B) $1,400
• C) $26,215
• D) $22,938

---

Definitions:

Chart of Accounts

A systematic list of all account titles and numbers being used by an organization to organize its financial transactions and to prepare financial reports.

FOB Destination

A shipping term indicating that the seller bears the shipping costs and retains ownership until the goods reach the buyer.

Trade Discount

A reduction in the list price granted by a supplier to a buyer, often based on the volume of goods purchased or as a promotion.

Freight Costs

Charges incurred for the transportation of goods from one location to another, often considered part of the cost of goods sold.