King Khan Corporation (KKC) manufactures kongs and kangs, the production of which requires considerable energy. Power generation department costs amounted to $4 million this month, for a total of 50 million kilowatt hours (kwh) supplied to the plant. Analysis shows that 40% of power generation costs are fixed. This month the Kong Dept. made 5 million kongs, each using 4 kwh, and the Kang Dept. made 4 million kangs, each using 6 kwh.

If KKC uses the simplest algorithm to allocate power costs, which is not true?

Select one:

a.Kang's charge will depend on Kong's usage

b.Since the production departments consume the vast majority of the plant's power costs, it is not cost-efficient to allocate power costs to the service departments

c.Kang will be charged $2.18 million

d.Kong will be charged $1.6 million