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

question 49

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. $\begin{array}{|l|l|}\hline \text { Available capacity } & 8,000,000 \text { pages } \\\hline \text { Budgeted us age: } & \\\hline \text { Software Development } & 1,600,000 \text { pages } \\\hline \text { Training } & 3,000,000 \text { pages } \\\hline \text { Management } & 2,400,000 \text { pages } \\\hline \text { Cost equation } & \$ 280,000+\$ 0.03 \text { per page } \\\hline\end{array}$ 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 2,950,000 copies during the year?

• A) $184,500.
• B) $191,750.
• C) $211,783.
• D) $206,500.

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Definitions:

Income Summary

An account in the ledger that aggregates all the revenues and expenses for the period, used to transfer net income or loss to owner's equity.

Merchandise Inventory

Goods a company holds for the purpose of sale to customers.

Unearned Rent

Unearned Rent is a liability representing rent payments received in advance for which the services have yet to be rendered or the occupancy period has not yet occurred.

Rental Income

Revenue received from leasing property or other assets to tenants.