Answer the following questions using the information below:
The Outback Aerial Medicorp has a central materials area (CMA).The CMA has only two users,the Large Plane Department and the Small Plane Department.The following data apply to the coming budget year:
Budgeted costs of operating the CMA for 10000 to 20000 technician hours per year:
Fixed costs per year $\$ 600000$
Variable costs $\$ 100$ per technician hour

Budgeted long-run usage in hours per year:

Large Plane Department 9000 technician hours
Small Plane Department 7000 technician hours Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 7500 technician hours and by the Small Plane Department was 6500 technician hours.
-If a single-rate cost-allocation method is used,what is the allocation rate per hour used?
A)$100.00
B)$137.50
C)$80.00
D)$146.67

Question

Answer the following questions using the information below:
The Outback Aerial Medicorp has a central materials area (CMA).The CMA has only two users,the Large Plane Department and the Small Plane Department.The following data apply to the coming budget year:
 Budgeted costs of operating the CMA for 10000 to 20000 technician hours per year:
Fixed costs per year $\$ 600000$
Variable costs $\$ 100$ per technician hour

Budgeted long-run usage in hours per year:

Large Plane Department 9000 technician hours
Small Plane Department 7000 technician hours Budgeted amounts are used to calculate the allocation rates.
Actual usage for the year by the Large Plane Department was 7500 technician hours and by the Small Plane Department was 6500 technician hours.
-If a single-rate cost-allocation method is used,what is the allocation rate per hour used?
A)$100.00
B)$137.50
C)$80.00
D)$146.67

Quizplus · Accepted Answer

The single-rate cost-allocation method uses a single allocation rate to allocate costs to different departments based on their usage of the central materials area. To calculate the allocation rate per hour used, we need to add the budgeted costs for the Large Plane and Small Plane departments and divide by the total budgeted usage (10,000 hours).
Allocation rate per hour used = (Budgeted costs for Large Plane + Budgeted costs for Small Plane) / Total budgeted usage
= ($1,375,000 + $1,125,000) / 10,000 hours
= $250 / hour
Since we are using a single rate, this allocation rate per hour used will be applied to both the Large Plane and Small Plane departments.
Therefore, the correct answer is B) $137.50

Answer the Following Questions Using the Information Below: the Outback $600000\$ 600000$600000

Answer the Following Questions Using the Information Below:
the Outback $\$ 600000$