Rice company has two production departments called assembly and finishing. the maintenance department serves both production...
Rice company has two production departments called assembly and finishing. the maintenance department serves both production departments. maintenance costs are allocated based on labor hours. budgeted fixed costs for the maintenance department are $40,000. budgeted variable costs for the maintenance department are $4.00 per labor hour.
other relevant data follow:
assembly finishing capacity available 18,000 labor hours 12,000 labor hours
capacity used 15,000 labor hours 9,000 labor hours
actual maintenance department costs: fixed $36,000 variable $100,000
the amount of fixed maintenance department costs allocated to the finishing department should be ________.
Homework Answers
| Budgeted Fixed Cost | 40000 | |
| Total Capacity Available = 18000 + 12000 | 30000 | Labor Hours |
| Fixed cost per labour hour | $ 1.33 | per Labor hour |
| Allocation to Finishing Department = $1.33 x 12000 labor hours | $ 16,000.00 |
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