Answer the Following Questions Using the Information Below:
Illumination Corp

question 131

Multiple Choice

Answer the following questions using the information below:
Illumination Corp operates one central plant that has two divisions, the Flashlight Division and the Night Light Division. The following data apply to the coming budget year:
Budgeted costs of operating the plant for 2,000 to 3,000 hours:
$\begin{array}{lr}\text { Fixed operating costs per year } & \$ 500,000 \\\text { Variable operating costs } & \$ 800 \text { per hour } \\\text { Budgeted long-run usage per year: } & 2,000 \text { hours } \\\text { Flashlight Division } & 1000 \text { hours } \\\text { Night Light Division } & 4,000 \text { hours }\end{array}$ Assume that practical capacity is used to calculate the allocation rates.
Actual usage for the year by the Flashlight Division was 1,500 hours and by the Night Light Division was 800 hours.
-If a single-rate cost-allocation method is used,what amount of cost will be allocated to the Flashlight Division? Assume actual usage is used to allocate operating costs.

• A) $1,247,500
• B) $1,300,000
• C) $1,487,500
• D) $1,387,500

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Definitions:

Tender

refers to an offer to perform an obligation or to pay an amount to fulfill the terms of a contract, or it can refer to the act of submitting such an offer.

Specific Performance

A decree from a court ordering a contracting party to carry out the promises made in a contract.

Compensatory Damages

Financial compensation awarded to plaintiffs in civil lawsuits for losses or injuries suffered due to the defendant's actions.

Cure

A remedy that restores health, fixes a problem, or corrects an error.