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 overhead allocated to Dept. 2 using activity-based costing. Direct Labor Hours Machine Hours Operating Dept. 1 980 9,200 Operating Dept. 2 2,100 6,000 Totals 3,080 15,200 Factory overhead costs Rent and utilities $21,700 Indirect labor 17,300 Depreciation - Equipment 14,000 Total factory overhead $53,000
A. $11,795.
B. $27,112.
C. $26,500.
D. $25,887.
E. $14,092.
Answer: D
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