22. XYZ operates a plant that has two divisions, the Product 1 Division and the Product...
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22. XYZ operates a plant that has two divisions, the Product 1 Division and the Product 2 Division. The following data apply to the coming budget year: Budgeted costs of operating the plant for 2,000 to 3,000 hours: Fixed operating costs per year o Variable operating costs Budgeted long-run usage per year: Product 1 Division $480,000 $900 per hour 1,500 hours 600 hours 3,000 hours 0 Product 2 Division Practical capacity Assume that practical capacity is used to calculate the allocation rates. Actual usage for the year by the Product 1 Division was 1,400 hours. Actual usage for the year by the Product 2 Division was 700 hours. If a dual-rate cost-allocation method is used, what amount of operating costs will be allocated to the Product 2 Division? (Do not round any intermediary calculations.) a. $726,000 b. $870,000 c. $636,000 d. $742,000 22. XYZ operates a plant that has two divisions, the Product 1 Division and the Product 2 Division. The following data apply to the coming budget year: Budgeted costs of operating the plant for 2,000 to 3,000 hours: Fixed operating costs per year o Variable operating costs Budgeted long-run usage per year: Product 1 Division $480,000 $900 per hour 1,500 hours 600 hours 3,000 hours 0 Product 2 Division Practical capacity Assume that practical capacity is used to calculate the allocation rates. Actual usage for the year by the Product 1 Division was 1,400 hours. Actual usage for the year by the Product 2 Division was 700 hours. If a dual-rate cost-allocation method is used, what amount of operating costs will be allocated to the Product 2 Division? (Do not round any intermediary calculations.) a. $726,000 b. $870,000 c. $636,000 d. $742,000
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