Fixed Costs Remain Constant at $200,000 Per Month

Multiple Choice

Fixed costs remain constant at $200,000 per month.During high-output months variable costs are $160,000, and during low-output months variable costs are $40,000.What are the respective high and low indirect cost allocation rates if professional labour-hours are 8,000 for high-output months and 2,000 for low-output months?

A) $45.00 per hour; $120.00 per hour
B) $45.00 per hour; $45.00 per hour
C) $25.00 per hour; $20.00 per hour
D) $56.20 per hour; $120.00 per hour
E) $25.00 per hour; $100.00 per hour