The Copy Department in the College of Business at State

question 85

Multiple Choice

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

• A) $135,000.
• B) $150,000.
• C) $155,000.
• D) $175,000.

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Definitions:

Circulating Security Interest

A floating charge over all of a company.

Floating Charge

A security interest over a fluctuating pool of assets, such as inventory or receivables, which allows the borrower to use the assets in the course of business.

Liquidator

A person or entity appointed to wind up the affairs of a company and dispose of its assets in the event of its liquidation.

Winding Up

The process of concluding a company's affairs, settling its liabilities, and distributing the remaining assets to the shareholders or owners.