Kraft,Inc,Has Two Producing Departments Normal Support Department Usage Is 8,000 Hours Each for Department

question 125

Multiple Choice

Kraft,Inc.,has two producing departments.Each producing department is held responsible for a share of the costs of a support department. Actual and budgeted data are as follows:
$\begin{array}{lr}\text { Support department hours used: }\\\text { Department X } & 12,000 \\\text { Department Y } & \underline{4,000} \\\text { Total hours } & \underline{16,000}\\\\\text { Support department costs: }\\\text { Actual support department costs } & \$ 48,000 \\\text { Budgeted fixed department costs } & \$ 20,000 \\\text { Budgeted variable rate per hour } & \$ 2.50\end{array}$

Normal support department usage is 8,000 hours each for Department X and Department Y.
-Assuming the direct method is used and the purpose is performance evaluation,what are support department costs allocated to Department X?

• A)$36,000
• B)$36,400
• C)$40,000
• D)$45,000

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