The Following Is Taken from Clausen Company's Internal Records of Its

question 38

Multiple Choice

The following is taken from Clausen Company's internal records of its factory with two operating departments. The cost driver for indirect labor is direct labor hours, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of overhead cost allocated to Dept. 1 using activity-based costing. $$\begin{array} { l c c } & \text { Direct Labor Hours } & \text { Machine Hours } \\\text { Operating Dept. 1 } & 980 & 9,200 \\\text { Operating Dept. 2 } & 2,100 & 6,000 \\\text { Totals } & 3,080 & 15,200 \\& & \\\text { Factory overhead costs } & &\\ \text { Rent and utilities } & & \$ 21,700 \\\text { Indirect labor } & & 17,300\\\text { Depreciation - Equipment } & & 14,000 \\\text { Total factory overhead } & & \$ 53,000\end{array}$$

• A) $25,888.
• B) $27,113.
• C) $14,092.
• D) $21,608.
• E) $5,505.

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