The Rainbow Company Manufactures Paint in Two Processes: Mixing and Heating

Multiple Choice

The Rainbow Company manufactures paint in two processes: Mixing and Heating. Total costs incurred in the Mixing and Heating departments are as follows: $\begin{array}{lll}&\text { Direct Materials }&\text { Direct labor }\\\text { Mixing } & \$ 60,000 & \$ 80,000 \\\text { Heating } & \$ 25,000 & \$ 50,000\end{array}$ Indirect manufacturing costs were $90,000 for the Mixing department and $180,000 for the Heating department. Rainbow Company manufactures two products, Fantastic Paint and Super Paint. Costs are allocated to these products in the following proportions: $\begin{array}{lllll}&\text { Mixing }&&\text { Heating }\\&DM&DL&DM&DL\\\text { Fantastic } & \mathbf{5 0} \% & \mathbf{8 0} \% & \mathbf{4 0} \% & \mathbf{8 0} \% \\\text { Super } & \mathbf{5 0} \% & \mathbf{2 0} \% & \mathbf{6 0} \% & \mathbf{2 0} \%\end{array}$ Indirect cost is allocated in proportion to the direct labor costs with each department. The Mixing department cost allocated to Fantastic is:

A) $166,000
B) $94,000
C) $230,000
D) $30,000