1. The fixed costs of operating the Best buy corp are $4,800,000 annually. Variable costs are incurred at the rate of $25 per maintenance-hour. On average, the company incurs 38,000 maintenance-hours per year. Budgeted and actual hours per user for 2019 are as follows:

Assume that budgeted maintenance-hours are used to calculate the allocation rates.

1. Using a single-rate allocation and budgeted usage, how much will each department be allocated?

2. Using a dual-rate allocation with fixed costs allocated according to budgeted hours and variable costs allocated to actual hours, how much overhead will each department be allocated?

Building and grounds Administration Customer Service IT Support Total Budgeted hours 10,000 2,500 18,000 7,500 38,000 Actual hours 9,800 1,600 22,500 7,800 41,700