A Company Incurred $120,000 of Common Fixed Costs and $180,000

Short Answer

A company incurred $120,000 of common fixed costs and $180,000 of common variable costs.These costs are to be allocated to Departments XX and YY.Data on capacity provided and capacity used are as follows: $$\begin{array} { c c c } & \text { Capacity Pravided } & \text { Capacity Used } \\\text { Department }& \text { in Hours } & \text { in Hours } \\ \text { XX } & 500 & 400\\\text { YY }&300&400\end{array}$$

Assume that both fixed and variable costs are allocated on the basis of capacity used.What are the fixed and variable costs allocated to Department XX?
$\begin{array}{llcc} &\text { Fixed } & \text {Variable } \\\end{array}$
A) $\begin{array}{llcc}\$ 60,000 & \$ 90,000 \\\end{array}$
B) $\begin{array}{llcc} \$ 60,000 & \$ 112,500\\\end{array}$
C) $\begin{array}{llcc} \$ 75,000 & \$ 90,000\\\end{array}$
D) $\begin{array}{llcc} \$ 75,000& \$ 112,500 \\\end{array}$