Fixed costs budgeted for Caldwell Company's Maintenance Department for the year totaled $480,000; actual fixed costs for the year totaled $510,000. The level of budgeted fixed costs is determined by peak-period requirements. The Milling Department requires 1/3 of the peak-period capacity and the Assembly Department requires 2/3.
-How much fixed maintenance cost should be charged to the Assembly Department at the end of the year for purposes of measuring performance?
A)$320,000
B)$340,000
C)$360,000
D)$382,500

Question

Quizplus · Accepted Answer

The fixed maintenance cost charged to the Assembly Department should be based on the budgeted or predetermined fixed costs, which is $320,000.

Fixed Costs Budgeted for Caldwell Company's Maintenance Department for the Year