1.Corporation "Victor" operates one central plant that has two divisions: Division 1 and Division 2

Budgeted costs of the operating

plant for 10,000 to 20,000 hours:$260,000

Fixed operating cost100 per hour

Variable Operating costs2,000 hours

Practical capacity

Budgeted long-run usage:

Division 1800 hours per year

Division 2500 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

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

Answer rating: 100% (QA)

To calculate the amount of cost allocated to Division 1 and Division 2 using the dualrate costallocation method we need to consider both fixed and var... View the full answer