QUESTION 7

1. Data Source Media manufactures cassettes and CDs in separate divisions utilizing one plant location. The following data have been prepared for review.

   Fixed operation costs	$450,000
   Practical capacity	1,250 hours
   Budgeted usage:
   Cassette Division	1,000 hours
   CD Division	175 hours
   Budgeted variable cost per hour	$600 per hour

   What is the total cost per hour of use for the CD Division assuming the budgeted rate is used for variable costs and practical capacity is the allocation base for fixed costs?

   		$315.79
   		$950.00
   		$924.00
   		$960.00