The IT department's cost data is as follows: Estimated Costs Fixed Costs $ 500,000 Variable,...
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Accounting
The IT department's cost data is as follows:
Estimated Costs
Fixed Costs $ 500,000
Variable, ($300 per hour) $600,000
Total $1,100,000
IT Departmental Usage:
Hours Department A Department B
Budgeted 1,100 900
Actual 1,300 1,200
The fixed costs are allocated based on relative budgeted hours with variable costs applied based on actual hours. Department A will be allocated total overhead of:
A. $715,000
B. $390,000
C. $605,000
D. $665,000
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