Illumination Corporation Operates One Central Plant That Has Two Divisions

question 19

Multiple Choice

Illumination Corporation operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:

Assume that practical capacity is used to calculate the allocation rates.
Actual usage for the year by the Flashlight Division was 1500 hours and by the Night Light Division was 800 hours. If a single-rate cost-allocation method is used, what amount of cost will be allocated to the Flashlight Division? Assume actual usage is used to allocate operating costs.

• A) $2,050,000
• B) $1,850,000
• C) $1,200,000
• D) $1,537,500

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Definitions:

Formation of Groups

The process through which individuals come together to form a collective with a common purpose or goal.

Attitudes of Individuals

The settled ways of thinking or feeling about someone or something, typically reflected in a person's behavior.

Intellectual and Physical Work

Tasks that require mental effort and reasoning (intellectual) alongside or in comparison to tasks requiring physical exertion and labor (physical).

Explaining Behaviour

The process of analyzing and understanding the reasons behind individuals' actions and reactions.