Question
1.Corporation Victor operates one central plant that has two divisions: Division 1 and Division 2 Budgeted costs of the operating plant for 10,000 to 20,000
1.Corporation "Victor" operates one central plant that has two divisions: Division 1 and Division 2
Budgeted costs of the operating
plant for 10,000 to 20,000 hours:$260,000
Fixed operating cost100 per hour
Variable Operating costs2,000 hours
Practical capacity
Budgeted long-run usage:
Division 1800 hours per year
Division 2500 hours per year
Assume that practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Division 1 was 700 hours
If dual-rate cost-allocation method is used, what amount of cost will be allocated to the Division 1? To the Division 2?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To calculate the amount of cost allocated to Division 1 and Division 2 using the dualrate costallocation method we need to consider both fixed and var...
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Step: 2
Step: 3
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Cost Accounting A Managerial Emphasis
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
6th Canadian edition
978-0132893534, 9780133389401, 132893533, 133389405, 978-0133392883
