The following is taken from Clausen Company\'s internal records of its factory w

Question

The following is taken from Clausen Company's internal records of its factory with two operating departments. The cost driver for indirect labor is direct labor hours, and the cost driver for the remaining items is number of hours of machine use. Compute the total amount of indirect labor allocated to Dept. 1 using activity-based costing Machine Hours 10,500 7,000 17, 500 Direct Labor 2 Hours points Operating Dept. 1 Operating Dept. 2 Totals 960 2,240 3,200 Factory overhead costs Rent and utilities Indirect labor Depreciation -Equipment $21,100 17,900 14,600 S53, 600 Total factory overhead

Explanation / Answer

All options provided are incorrect,answer is 5370

Particulars Amt Indirect labor (A)    17,900.00 Labor Hours (B)      3,200.00 Per Hours (C = A/B)              5.59 Department 1Hours (D)          960.00 Cost Allocated (C x D)      5,370.00

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