Question 2. The Drone Corporation has a central materials laboratory. The laboratory has only two

users, the Large Dronee Department and the Small Drone Department. The following data apply to

the coming budget year:

Budgeted costs of operating the materials laboratory

for 150,000 to 250,000 technician hours per year:

Fixed costs per year $7,200,000

Variable costs $71 per technician hour

Budgeted long-run usage in hours per year:

Large Plane Department 90,000 technician hours

Small Plane Department 70,000 technician hours

Budgeted amounts are used to calculate the allocation rates.

Actual usage for the year by the Large Drone Department was 80,000 technician hours and by the

Small DroneDepartment was 120,000 technician hours. If a dual-rate cost-allocation method is used,

what amount of materials laboratory costs will be allocated to the Small Drone Department? Assume

budgeted usage is used to allocate fixed materials laboratory costs and actual usage is used to allocate

variable materials laboratory costs. (10 Points)

Question 3. AmaraCompany processes beet root into three products. During May, the joint costs of

processing were $600,000. Production and sales value information for the month were as follows:

Product Units Produced Sales Value at

Split-off Point

Separable

costs

S1 15,000 $200,000 $60,000

S2 10,000 175,000 192,000

F1 5,000 125,000 96,000

Required:

Determine the amount of joint cost allocated to each product if the sales value at split-off method is

used. (10 Points)