Excellence Pastries produces baked goods.Utility costs are allocated to the products based on the baking time required for the product.Utility costs of $291,500 are budgeted in a period when 550,000 total minutes of baking time and 100,000 minutes of cooling time are anticipated.If a batch of rolls bakes for 45 minutes, and then cools for 15 minutes, what amount of utility cost will be allocated to each batch of rolls?

Question

Quizplus · Accepted Answer

Utility costs are allocated based on baking time. The cost per minute of baking is $291,500 / 550,000 minutes = $0.53 per minute. For a batch of rolls that bakes for 45 minutes, the utility cost allocated is 45 minutes * $0.53 = $23.85.

Excellence Pastries Produces Baked Goods