A company has recorded the following costs for two support departments, the property management and quality control department, as well as two production departments, 1 and 2.

Other indirect production costs are 15,000,000 USD due to property maintenance and 4,200,000 USD. due to quality control department.

The company has kept track of the relative working hours of the support departments for each other as well as the production departments and has presented the following breakdown because of this:

	Property management	Quality control department	Production department 1	Production department 2
Property management	0	0,1	0,6	0,3
Quality control department	0,25	0	0,35	0,4

Use the step-down method to allocate costs and start by allocating the costs of the quality control department.

What is the total indirect manufacturing cost that will be allocated to Production Department 1.

Answer:

1. 9.630.000
2. 7.300.000
3. 5.350.000
4. 10.700.000