Illumination Corp Operates One Central Plant That Has Two Divisions

question 117

Multiple Choice

Illumination Corp 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 1400 hours and by the Night Light Division was 700 hours. If a dual-rate cost-allocation method is used, what amount of cost will be allocated to the Night Light Division? Assume budgeted usage is used to allocate fixed operating costs and actual usage is used to allocate variable operating costs.

• A) $516,000
• B) $586,000
• C) $532,000
• D) $602,000

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Definitions:

Dendrites

The branched projections of a neuron that act to propagate the electrochemical stimulation received from other neural cells to the cell body, or soma, of the neuron from which the dendrites project.

Synapses

The junctions at which neurons communicate with other neurons, muscles, or glands through electrical or chemical signals.

Neurons

Specialized cells within the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Primary Function

The primary function refers to the main or most important role or purpose that an entity or system is designed or naturally evolved to perform.