355 Monthly indirect production costs are $400,000. The cost-allocation base for indirect costs is machine...
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Accounting
355
Monthly indirect production costs are $400,000. The cost-allocation base for indirect costs is machine hours. The budgeted capacity for the month is 40,000 machine hours. Product X used 5,000 machine hours, Product Y used 15,000 machine hours and Product Z used 20,000 machine hours. How much of the indirect costs are allocated to Products X and Y?
Select one:
a. $5,000 to X; $15,000 to Y
b. None of the options is correct
c. $2,500 to X; $7,500 to Y
d. $50,000 to X; $150,000 to Y
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