Question
11. ACC Inc allocates indirect costs using a single cost pool to each unit of output it produces using machine hours. It uses a pre-determined
11. ACC Inc allocates indirect costs using a single cost pool to each unit of output it produces using machine hours. It uses a pre-determined allocation rate.
The information provided below relates to the period 1 Jan 2021 until 31 Dec 2021 for ACC.
Actual total indirect cost = $800,000
Budgeted total indirect cost = $600,000
Actual quantity of machine hours = 450,000 hours
Budgeted quantity of machine hours = 400,000 hours
The allocation rate that is used by ACC to allocate indirect costs to its units of output in 2021 is closest to:
Group of answer choices
0.67
1.78
1.33
0.55
1.50
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