The managers of ACME Manufacturing are discussing ways to allocate the cost of service departments, such as quality control and maintenance, to the production departments.To aid them in this discussion, the controller has provided the following information:

Using the direct allocation method, the total amount of overhead allocated to each machine hour would be which of the following?
a. $9.35
b. $5.25
c. $2.40
d. $8.00
e. $15.65

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Quality Control Maintenance Machining Assembly Total Budgeted overhead $350,000 $200,000 $400,000 $300,000 $1,250,000 costs before allocation Budgeted machine hours 50,000 50,000 25,000 Budgeted direct labour hours 25,000 7,000 7,000 Budgeted hours of service: Quality control 21,000 35,000 Maintenance 10,000 18,000 12,000 40,000