1. 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:

   Division 1 800 hours per year

   Division 2 500 hours per year

   Assume that practical capacity is used to calculate the allocation rates. Further assume that actual usage of the Division 1 was 700 hours and the Division 2 was 400 hours.

   Required:

   If a single-rate cost-allocation method is used, what amount of cost will be allocated to the Division 1? To the Division 2? Assume actual usage is used to allocate operating costs.

   	A.	$ 91,000 and $52,000
   	B.	$15,000 and 8,000
   	C.	$161,000 and 92,000
   	D.	None of them