Clausen Company internal records of its factory with 2 operating departments. The cost driver for indirect...

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Clausen Company internal records of its factory with 2 operatingdepartments. The cost driver for indirect labor is direct laborhouse, and the cost driver for the remaining items is number ofhours of machine use. Compute the total amount of indirectlabor allocated to Department 1 using activity basedcosting. (Please show the formula and how you got theanswer)
DL HOURS MACHINE HOURS
Department 1 894 12,000
Department 2 2086 8,000
Totals 2980 20,000
Factory Overhead costs
Rent and Utilities 21,200
Indirect Labor 16,800
Depreciation - Equipment 13,500
Total Factory Overhead $51,500
Answers:
a) 8,000
b) 53,000
c) 12,270
d) 8, 480
e) 14,133

Answer & Explanation Solved by verified expert

4.4 Ratings (623 Votes)

All working forms part of the answer Note that you have asked for Indirect labor allocated to Department 1 The correct answer is 5040 which is equal to See Answer

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Clausen Company internal records of its factory with 2 operatingdepartments. The cost driver for indirect labor is direct laborhouse, and the cost driver for the remaining items is number ofhours of machine use. Compute the total amount of indirectlabor allocated to Department 1 using activity basedcosting. (Please show the formula and how you got theanswer)DL HOURSMACHINE HOURSDepartment 189412,000Department 220868,000Totals298020,000Factory Overhead costsRent and Utilities21,200Indirect Labor16,800Depreciation - Equipment13,500Total Factory Overhead$51,500Answers:a) 8,000b) 53,000c) 12,270d) 8, 480e) 14,133

	DL HOURS	MACHINE HOURS
Department 1	894	12,000
Department 2	2086	8,000
Totals	2980	20,000

Factory Overhead costs
Rent and Utilities		21,200
Indirect Labor		16,800
Depreciation - Equipment		13,500
Total Factory Overhead		$51,500