The following information is available for Company X:
Fixed costs are constant at $400000 per month
During high-output months variable costs are $320000, with 16000 budgeted machine hours
During low-output months variable costs are $80000, with 4000 budgeted machine hours
Compute the respective cost allocation rates per machine hour for both the high-output and low-output months.

Question

The following information is available for Company X:

Fixed costs are constant at $400000 per month
During high-output months variable costs are $320000, with 16000 budgeted machine hours
During low-output months variable costs are $80000, with 4000 budgeted machine hours

Compute the respective cost allocation rates per machine hour for both the high-output and low-output months.

Accepted Answer

High-output months: $45.00 per hour; Low-output months: $120.00 per hour

Answer

High-output months: $25.00 per hour; Low-output months: $20.00 per hour

Answer

High-output months: $56.20 per hour; Low-output months: $120.00 per hour

Answer

None of the other options is correct

Answer

High-output months: $45.00 per hour; Low-output months: $45.00 per hour

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