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pduvin pduvin
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6 years ago
Fixed costs remain constant at $200,000 per month. During high-output months variable costs are $160,000, and during low-output months variable costs are $40,000. What are the respective high and low indirect cost allocation rates if professional labour-hours are 8,000 for high-output months and 2,000 for low-output months?
A) $45.00 per hour; $120.00 per hour
B) $45.00 per hour; $45.00 per hour
C) $25.00 per hour; $20.00 per hour
D) $56.20 per hour; $120.00 per hour
E) $25.00 per hour; $100.00 per hour
Textbook 
Cost Accounting: A Managerial Emphasis, Canadian Edition

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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#1
6 years ago
A
Explanation:  A)    $200,000/8,000 = 25.00   $200,000/2,000 = $100.00
   $160,000/8,000 = 20.00   $40,000/2,000 = 20.00
   High Month = $45.00   Low Month = $120.00
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