A Company Incurred $80,000 of Common Fixed Costs and $120,000

Multiple Choice

A company incurred $80,000 of common fixed costs and $120,000 of common variable costs. These costs are to be allocated to Departments A and B. Data on capacity provided and capacity used are as follows: Assume that both fixed and variable costs are allocated on the basis of capacity used. The fixed and variable costs allocated to Department A are

A) $40,000 $60,000
B) $50,000 $60,000
C) $40,000 $75,000
D) $50,000 $75,000