Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows:
Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable.
* in labour hours
-The amount of fixed maintenance costs allocated to the Finishing Department should be
A) $12,000.
B) $ 8,000.
C) $ 9,333.
D) $ 7,500.

Question

Boone Manufacturing has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $20,000, and the variable cost per labour hour was $3.00. Other relevant data for 20X3 are as follows:
  Actual maintenance department costs for 20X3 were $24,000 fixed and $50,000 variable.
 * in labour hours
-The amount of fixed maintenance costs allocated to the Finishing Department should be
A) $12,000. 
B) $ 8,000. 
C) $ 9,333. 
D) $ 7,500.

Quizplus · Accepted Answer

The fixed maintenance costs are allocated based on a predetermined rate or method. Without additional context or data, $8,000 is the most likely allocation based on typical departmental cost distribution practices.

Boone Manufacturing Has Two Production Departments, Mixing and Finishing, Served