FIGURE 7-4 Xi Print Operates a Copy Business at Two

question 38

Multiple Choice

FIGURE 7-4 Xi Print operates a copy business at two different locations.Xi Print has one support department that is responsible for cleaning, service, and maintenance of its copying equipment.The costs of the support department are allocated to each copy center on the basis of total copies made.
During the first month, the costs of the support department were expected to be $200,000.Of this amount, $60,000 is considered a fixed cost.During the month, the support department incurred actual variable costs of $128,000 and actual fixed costs of $72,000.
Normal and actual activity (copies made) are as follows:

- Refer to Figure 7-4.Support department costs NOT allocated to the two copy centers are

• A) $22,000.
• B) $9,840.
• C) $8,400.
• D) $6,000.

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Definitions:

Abatement

A reduction, decrease, or the lessening in severity or intensity of a legal action, amount, or property value, often related to tax or rent.

Purchase Agreement

A legal document between a buyer and seller outlining the terms and conditions of a transaction or sale of goods, property, or services.

Survey

A drawing of the boundaries of a property prepared by a professional surveyor.

Encumbrances

Legal claims or liabilities attached to property that can affect its use, value, or transferability, such as mortgages or liens.