Monthly Indirect Production Costs Are $400,000 D) None of the Above

Short Answer

Monthly indirect production costs are $400,000.The cost-allocation base for indirect costs is machine hours.The budgeted capacity for the month is 40,000 machine hours.Product X used 5,000 machine hours,Product Y used 15,000 machine hours and Product Z used 20,000 machine hours.How much of the indirect costs are allocated to Products X and Y?
$\begin{array}{ll}&\text { Product X }&\text { Product Y }\\\text { A) } &\$ 2,500 & \$ 7,500 \\\text { B) }& \$ 5,000 & \$ 15,000 \\\text { C) } &\$ 50,000 & \$ 150,000\end{array}$
D) none of the above