Engineering, 28.11.2019 18:31, amunnik04

King khan corporation (kkc) manufactures kongs and kangs, the production of which requires considerable energy. power generation department costs amounted to $4 million this month, for a total of 50 million kilowatt hours (kwh) supplied to the plant. analysis shows that 40% of power generation costs are fixed. this month the kang dept. made 5 million kangs, each using 4 kwh, and the kang dept. made 4 million kangs, each using 6 kwh. if kkc uses the simplest algorithm to allocate power costs, which is not true?

a. kong will be charged $1.6 million

b. kang will be charged $2.18 million

c. kang’s charge will depend on kong’s usage

d. since the production departments consume the vast majority of the plant’s power costs, it is not cost-efficient to allocate power costs to the service departments

e. all are true

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King khan corporation (kkc) manufactures kongs and kangs, the production of which requires considera...