James Company has two production departments called Mixing and Finishing.The maintenance department serves both production departments.Budgeted fixed costs for the maintenance department are $30,000.Budgeted variable costs for the maintenance department are $5.00 per labor hour.Actual maintenance department costs are $36,000 fixed and $100,000 variable.Other relevant data follow: The amount of variable maintenance department costs allocated to the Mixing Department should be ________.
A)$48,000
B)$62,500
C)$75,000
D)$100,000

Question

James Company has two production departments called Mixing and Finishing.The maintenance department serves both production departments.Budgeted fixed costs for the maintenance department are $30,000.Budgeted variable costs for the maintenance department are $5.00 per labor hour.Actual maintenance department costs are $36,000 fixed and $100,000 variable.Other relevant data follow:  The amount of variable maintenance department costs allocated to the Mixing Department should be ________.
A)$48,000 
B)$62,500 
C)$75,000 
D)$100,000

Quizplus · Accepted Answer

To allocate variable maintenance department costs to Mixing Department, we need to know the total number of labor hours used by Mixing Department. This information is not provided in the question. Therefore, we cannot calculate the allocation of variable maintenance department costs accurately.

James Company Has Two Production Departments Called Mixing and Finishing