Question

Consider the following information attributed to the material management department Budgeted usage of materialsminushandling laborminushours 3 comma 900 Budgeted cost​ pools: Fixed costs $ 163 comma 800 Variable costs $ 128 comma 700 ​(3 comma 900 hours x $ 33 per​ hour) The company uses the singleminusrate method to allocate support costs to the Machining and Assembly Departments. Assuming that the actual hours tracked in the Machining and Assembly department are 420 for the​ month, what would be the allocation rate and how much cost would be allocated to the Machining and Assembly Department for the operations of the​ month? (Round final answers to the nearest​ dollar.) A. $ 33 an hour for a total of $ 31 comma 500 B. $ 75 an hour for a total of $ 31 comma 500 C. $ 696 an hour for a total of $ 75 D. $ 33 an hour for a total of $ 13 comma 860

Answer 1

Answer:

Explanation:

Fixed costs per hour = 163,800/3900 = $42 per hour

Allocation rate = fixed cost per hour + variable cost per hour = $42+$33 = $75

Cost allocated to departments = $75 * 420 = $31,500

So the answer is B - $ 75 an hour for a total of $ 31 comma 500