Question
The Speedy Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane Department. The
The Speedy Aircraft Corporation has a central materials laboratory. The laboratory has only two users, the Large Plane Department and the Small Plane 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: $8,600,000 Variable costs: $73 per technician hour Budgeted long-run usage in hours per year: Large Plane Department: 80,000 technician hours Small Plane Department: 120,000 technician hours Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Large Plane Department was 60,000 technician hours and by the Small Plane Department was 100,000 technician hours. If a single-rate cost-allocation method is used, compute the allocation rate per hour used. (Round the final answer to the nearest dollar.)
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