Solution-What amount of cost will be allocated to the

What amount of cost will be allocated to the division

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Reference no: EM132948722

Question - Corporation "Victor" operates one central plant that has two divisions: Division 1 and Division 2 Budgeted costs of the operating plant for 10,000 to 20,000 hours: $260,000

Fixed operating cost 100 per hour

Variable Operating costs 2,000 hours

Practical capacity

Budgeted long-run usage:

Division 1 800 hours per year

Division 2 500 hours per year

Assume that practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Division 1 was 700 hours and Division 2 was 400 hours.

If a single-rate cost- allocation method is used, what amount of cost will be allocated to the Division 1? To the Division 2?

a. none

b. 91,000 and 52,000

c. 15,000 and 8,000

d. 161,000 and 92,000

Reference no: EM132948722

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What amount of cost will be allocated to the division

Reference no: EM132948722

Reference no: EM132948722

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