Patricia Corporation is developing a new research lab that requires fixed costs of $100,000 per year...

 

Transcribed Image Text:

Patricia Corporation is developing a new research lab that requires fixed costs of $100,000 per year and variable costs of $10 per machine hour for the lab equipment. This is based on a budget of 1,000 hours for the year. Patricia has two departments that will be using the lab: Department A and Department B. It is expected that Department A will use 750 hours and Department B will use 250 hours. At year end, it was determined that Department A used 625 hours and Department B used 375 hours. Calculate the allocation of the lab's costs based on a single rate system of allocation and then based on a dual rate system. Patricia Corporation is developing a new research lab that requires fixed costs of $100,000 per year and variable costs of $10 per machine hour for the lab equipment. This is based on a budget of 1,000 hours for the year. Patricia has two departments that will be using the lab: Department A and Department B. It is expected that Department A will use 750 hours and Department B will use 250 hours. At year end, it was determined that Department A used 625 hours and Department B used 375 hours. Calculate the allocation of the lab's costs based on a single rate system of allocation and then based on a dual rate system.

Answer rating: 100% (QA)

Single rate system of allocation Dual rate system if you find this answer useful do not forget to ... View the full answer