Answer the Following Questions Using the Information Below:
the Outback $\$ 600000$

question 35

Multiple Choice

Answer the following questions using the information below:
The Outback Aerial Medicorp has a central materials area (CMA) .The CMA has only two users,the Large Plane Department and the Small Plane Department.The following data apply to the coming budget year:
Budgeted costs of operating the CMA for 10000 to 20000 technician hours per year:
Fixed costs per year $\$ 600000$
Variable costs $\$ 100$ per technician hour

Budgeted long-run usage in hours per year:

Large Plane Department 9000 technician hours
Small Plane Department 7000 technician hours Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 7500 technician hours and by the Small Plane Department was 6500 technician hours.
-If a single-rate cost-allocation method is used,what amount of CMA costs will be allocated to the Large Plane Department?

• A)$822 500
• B)$763 750
• C)$1 057 500
• D)$1 031 250

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