Assignment
Blue Inc.'s copy department does all of the photocopying for the marketing and human resources departments. Blue Inc. budgets the following costs for the coming year based on 5,000,000 copies:
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Salaries and wages (fixed)
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$60,000
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Employee Benefits (fixed)
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$8,000
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Paper (variable $.01 per copy)
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$50,000
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Toner (variable $.01 per copy)
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$50,000
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Depreciation (fixed)
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$10,000
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Utilities (fixed)
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$4,000
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Total
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$182,000
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The copy department's costs are allocated to the marketing and human resources departments based on $.037 per copy.
1. If actual copies made are 4,800,000 what are the costs allocated to each department assuming the marketing department requested 2,500,000 copies and HR requested 2,300,000 copies.
2. What are the problems with using one allocation rate for the copy department's costs?
3. Devise a better allocation system based on pooling costs. Show how the costs would be allocated based on your new system.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.