The City of Nanaimo signed a lease to photocopy machine for 2500 a month and 0.02 per copy. Operating costs are variable at 0.03 per copy. They projected to use 100,000 copies for the month. One department predicted it would produce 36,000 copies and produced 42000 copies.

1. What rate would they use to allocate the cost and how much would be allocated to the one department
2. Suppose fixed and variable were allocated seperatley specify how each pool should be allocated, as well as allocate the department with the data in the question.
3. Which method, do you prefer 1 or 2 and explain.