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Andover,, Inc., has two producing departments. Each producing department is held responsible for a share...

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Accounting

Andover,, Inc., has two producing departments. Each producing department is held responsible for a share of the costs of a support department. Actual and budgeted data are as follows:

Support department hours used:
Department L

12,000
Department M

4,000
Total hours

16,000
Support department costs:
Actual support department costs

$48,000
Budgeted fixed department costs

$20,000
Budgeted variable rate per hour

$ 2.50

Normal support department usage is 8,000 hours each for Department L and Department M. Assuming the direct method is used and the purpose is product costing, support department costs allocated to Department L are

Select one:

a. $30,000.

b. $20,400.

c. $24,800.

d. $20,000.

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