42. Monthly indirect production costs are $500,000. The cost-allocation base for indirect costs is machine hours. The budgeted capacity for the month is 100,000 machine hours. Product X used 15,000 machine hours, Product Y used 20,000 machine hours and Product Z used 25,000 machine hours. How much of the indirect costs are allocated to Products Y and Z?

Product Y Product Z

A) $2,500 $7,500

B) $100,000 $125,000

C) $150,000 $175,000

D) none of the above

43. Depreciation Expense on the Heating and Air Conditioning Equipment for the factory of $40,000 is allocated to five departments. The cost-allocation base for this expense is the number of cubic feet, which equals 100,000 cubic feet. Information for five departments is below:

Department Square Feet Cubic Feet

Department A 15,000 10,000

Department B 10,000 20,000

Department C 30,000 15,000

Department D 20,000 30,000

Department E 10,000 25,000

How much Depreciation Expense is allocated to Department B?

A) $12,500

B) $8,500

C) $15,000

D) $8,000

44. Indirect production costs do NOT include ________.

A) property taxes on factory building

B) rent expense on factory building

C) wages of security guards at corporate headquarters

D) wages of forklift truck operators in assembly area