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Hardy Inc. has two operating departments (1 and 2) and is considering renting a new...

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Accounting

Hardy Inc. has two operating departments (1 and 2) and is considering renting a new machine to help automate the printing process. The normal rental for the machine is $25/hour, but for rentals that exceed 1,000 hours the rental rate drops to $22/hour. Operating Dept 1 needs the machine for 300 hours. Operating Dept 2 needs the machine for 900 hours.

If Hardy uses the incremental method and Operating Department 2 is the primary user, how much of the cost will be allocated to Department 1?

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