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The Fixed Costs of Black Company's Personnel Department Are Allocated

Question 111

Multiple Choice

The fixed costs of Black Company's personnel department are allocated to operating departments on the basis of direct labor-hours. The following data have been provided:
 Operatirg Department XY Direct labor-hours - Long-run average 15,00010,000 Direct labor-hours - Actual 10,0006,000\begin{array} {r} { \text { Operatirg Department } } \\\begin{array}{ | l | c | c | } \hline & \mathrm { X } & \mathrm { Y } \\\hline \text { Direct labor-hours - Long-run average } & 15,000 & 10,000 \\\hline \text { Direct labor-hours - Actual } & 10,000 & 6,000 \\\hline\end{array}\end{array}
The fixed costs of the personnel department are budgeted at $56,000 per year and are incurred in order to support long-run average requirements. How much of this fixed cost should be charged to Operating Department X at the end of the year for performance evaluation purposes?


A) $35,000.
B) $33,600.
C) $52,500.
D) $22,400.

Correct Answer:

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