Allocation of utility costs
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Yesteryear Gift Shop produces pottery figurines. Utility costs are allocated to products based on the amount of time spent on the pottery wheel. Utility costs of $3,000 per month are budgeted and the store anticipates spending 7,500 minutes on the pottery wheel each month. If a vase uses 18 minutes on the pottery wheel how much of the utility costs will be allocated to each vase?
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Solution Summary
The solution explains how to calculate the amount of utility costs to be allocated to production.
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