The corporation Victor operates one central plant that has one support department and two production divisions: Division 1 and Division 2. The following data apply to the coming budget year Budgeted costs of the support department: Fixed operating costs $260,000 Variable operating costs $100 per hour Practical capacity 2, 000 hours Budgeted long-run usage per year: Division1: 800 hours Division2: 500 hours Assume the practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Division 1 was 900 hours and Division 2 was 400 hours

Required: If a dual rate cost-allocation method is used, what amount of cost will be allocated to the Division 1? To the Division 2?

a. $174,000 and $105,000 b. None of these c. $90,000 and 105,000 d. $194,000 and 105,000