Consider the following information attributed to the material management department
Budgeted usage of materials-handling labor-hours 3500
Budgeted cost pools:
Fixed costs $154,000
Variable costs $126,000 (3500 hours x $36 per hour)
The company uses the single-rate method to allocate support costs to the Machining and Assembly Departments. Assuming that the actual hours tracked in the Machining and Assembly department are 500 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) $80 an hour for a total of $40,000
B) $36 an hour for a total of $40,000
C) $36 an hour for a total of $18,000
D) $560 an hour for a total of $80

Question

Quizplus · Accepted Answer

Fixed costs per hour: $154,000 / 3500 = $44 per hour
Allocation rate: $36 + $44 = $80 per hour
Cost allocated to department: $80 per hour x 500 hours = $40,000

Consider the Following Information Attributed to the Material Management Department