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

question 50

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 dual-rate cost-allocation method is used,what amount of CMA costs will be budgeted for the Large Plane Department?

• A)$1 237 500
• B)$1 880 000
• C)$1 600 000
• D)$822 500

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Definitions:

Sales Commissions

Payments made to salespeople, typically calculated as a percentage of the sales they generate.

Overhead Costs

Expenses related to the operation of a business that cannot be directly tied to a specific product or service, such as utilities or administrative salaries.

Cost of Goods Manufactured

This refers to the total production cost incurred by a company to manufacture products in a specific period, including materials, labor, and overhead costs.

Ending Inventory

The total value of all goods available for sale at the end of an accounting period.