(Appendix 11B) Frame Corporation's Maintenance Department provides services to the company's two operating divisions--the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak-period. Data appear below:

-How much actual Maintenance Department cost should not be allocated to the operating divisions at the end of the year?
A) $12,134
B) $8,194
C) $0
D) $3,940

Question

(Appendix 11B) Frame Corporation's Maintenance Department provides services to the company's two operating divisions--the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak-period. Data appear below:
 
-How much actual Maintenance Department cost should not be allocated to the operating divisions at the end of the year?
A) $12,134 
B) $8,194 
C) $0 
D) $3,940

Quizplus · Accepted Answer

11ea7761_1685_9ec7_81a5_454657f9e914_TB2580_00 ¹ (12,010 cases + 28,960 cases) × $6 per case = $245,820 Total spending variance not allocated to the operating divisions = $8,194 + $3,940 = $12,134

(Appendix 11B) Frame Corporation's Maintenance Department Provides Services to the Company's