Lopez Company Has a Purchasing Department That Provides Services to a Factory

question 39

Essay

Lopez Company has a purchasing department that provides services to a factory located in Muncie and another in North Bend. Budgeted costs for the purchasing department consist of $72,000 per year of fixed costs and $5 per purchase order for variable costs.
The level of budgeted fixed costs is determined by peak-period requirements. The Muncie factory requires 4/9 of the peak-period capacity and the North Bend factory requires 5/9. Variable costs are driven by the number of purchase orders processed.
During the year, 3,500 purchase orders were processed for the Muncie factory and 4,500 purchase orders for the North Bend factory.
Required:
Compute the amount of purchasing department cost that should be charged to each factory for the year.

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Definitions:

Post-War Slavery

Refers to the continuation or new forms of slavery that existed following major wars, often exploiting the vulnerabilities created by the conflict.

Gradual Freedom

A process where enslaved individuals were slowly emancipated, often involving stipulations or waiting periods before freedom was fully granted.

Northern States

Referring to states located in the northern part of a country, often used in the context of the United States during the Civil War era, which were opposed to slavery.