Redford Company's Power Plant Provides Electricity for Its Two Producing $\$ 400,000$

Redford Company's power plant provides electricity for its two producing departments, A and B. The budget for the power plant shows the following: Budgeted fixed costs $\$ 400,000$
Budgeted variable cos ts per kilowatt hour $\quad\quad \$ 1$
Additional data are as follows:
$\begin{array}{l}&\text { Dept. A }&\text { Dept. B }\\\text { Long- runcap acity available } \mathrm{e}^{*} & 350,000 & 200,000 \\\text { Budgeted } ^{*} & 280,000 & 175,000 \\\text { Actual }^{*} & 270,000 & 165,000\\{ }^{*} \text { in kilowatt hours }\end{array}$ Actual power plant costs were $215,000 fixed and $350,000 variable.
Required:
a. Compute the amount of fixed costs allocated to each department.
b. Compute the amount of variable costs allocated to each department.

Correct Answer:

Verified

a. 350,000 + 200,000 = 550,000 kilowatt ...

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