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Question - In 2015, Kranworth started allocating corporate R&D costs among its three divisions (Retail, Wholesale, Custom) using the dual rates method. The following information is available for 2015:
Actual R&D costs total 700,000
Budgeted total costs 670,000
Budgeted fixed 480,000
Budget (variable cost per hour) 100
Total R&D capacity (hours) 2,527
Retail Wholesale Custom
Budgeted hours 500 1,000 400
Total actual hours 600 1,100 500
Required - What fixed cost rate should be used for 2015?
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