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Answer the following question(s) using the information below: The Fancy Flier Airplane Corporation has a central materials laboratory. The laboratory has only two users,
Answer the following question(s) using the information below: The Fancy Flier Airplane Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The following data apply to the coming budget year: Budgeted costs of operating the materials laboratory for 10,000 to 20,000 technician hours per year: Fixed costs per year Variable costs Budgeted long-run usage in hours per year. Large Plane Department Small Plane Department $600,000 $80 per technician hour 9,000 technician hours 7,000 technician hours Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Large Plane Department was 6,000 technician hours and by the Small Plane Department was 6,500 technician hours. If a dual-rate cost allocation method is used, what amount of materials laboratory costs will be allocated to the Small Plane Department? Assume budgeted usage is used to allocate materials laboratory costs and actual usage is used to allocate variable materials laboratory costs.
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