Clausen Company internal records of its factory with 2 operating departments. The cost driver for indirect labor is direct labor house, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of indirect labor allocated to Department 1 using activity based costing. (Please show the formula and how you got the answer)

	DL HOURS	MACHINE HOURS
Department 1	894	12,000
Department 2	2086	8,000
Totals	2980	20,000
Factory Overhead costs
Rent and Utilities		21,200
Indirect Labor		16,800
Depreciation - Equipment		13,500
Total Factory Overhead		$51,500

Answers:

a) 8,000

b) 53,000

c) 12,270

d) 8, 480

e) 14,133