A Company Incurred $120,000 of Common Fixed Costs and $180,000

question 25

Short Answer

A company incurred $120,000 of common fixed costs and $180,000 of common variable costs.These costs are to be allocated to Departments XX and YY.Data on capacity provided and capacity used are as follows: $$\begin{array} { c c c } & \text { Capacity Pravided } & \text { Capacity Used } \\\text { Department }& \text { in Hours } & \text { in Hours } \\ \text { XX } & 500 & 400\\\text { YY }&300&400\end{array}$$

Assume that both fixed and variable costs are allocated on the basis of capacity used.What are the fixed and variable costs allocated to Department XX?
$\begin{array}{llcc} &\text { Fixed } & \text {Variable } \\\end{array}$
A) $\begin{array}{llcc}\$ 60,000 & \$ 90,000 \\\end{array}$
B) $\begin{array}{llcc} \$ 60,000 & \$ 112,500\\\end{array}$
C) $\begin{array}{llcc} \$ 75,000 & \$ 90,000\\\end{array}$
D) $\begin{array}{llcc} \$ 75,000& \$ 112,500 \\\end{array}$

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Definitions:

Organize

To arrange or order things in a structured manner, making them more systematic and accessible.

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The practices and routines involved in ensuring the health, safety, and well-being of babies, typically up to one year of age.

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To work or act together towards a common goal or benefit.

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A system of proteins in the blood that enhances the ability of antibodies and phagocytic cells to clear pathogens from an organism.