Tyler's Consulting Company has purchased a new $15,000 copier. This overhead cost will be shared by the purchasing, accounting, and information technology departments since those are the only departments which will be able to access the machine. The company has decided to allocate the cost based on the number of copies made by each department. The copier is estimated to provide 1 million copies over its life. Each division has estimated the number of copies which will be made over the life of the copier.
- Purchasing $350,000
- Accounting $200,000
- Information Tech $400,000
Note: cost allocation is are computed to 4 significant digits.
How much overhead will be allocated each time a copy is made?