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Author Question: Illumination Corporation operates one central plant that has two divisions, the Flashlight Division ... (Read 106 times)

ec501234

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on: Mar 6, 2021
Illumination Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:

Budgeted costs of operating the plant for 2000 to 3000 hours:
Fixed operating costs per year$480,000
Variable operating costs$800per hour
Budgeted long-run usage per year:
Flashlight Division1500hours
Night Light Division600hours
Practical capacity3000hours

Assume that practical capacity is used to calculate the allocation rates.

Actual usage for the year by the Flashlight Division was 1400 hours and by the Night Light Division was 700 hours. If a single-rate cost-allocation method is used, what amount of operating costs will be budgeted for the Flashlight Division?
◦ $1,440,000
◦ $1,344,000
◦ $1,424,000
◦ $1,360,000
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by ec501234 on Mar 6, 2021

DHRUVSHAH

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Reply #1 on: Mar 6, 2021
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ec501234

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Reply 2 on: Mar 6, 2021
Excellent

essyface1

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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