Manning Products, Inc., operates an electric power plant that provides all electrical power for the company's Machining and Fabrication Departments. Information on kwh of power usage in these departments for May follows:

The costs of the electric power plant are all fixed. The level of budgeted fixed costs is determined by the peak-period requirements. Budgeted fixed costs for May totaled $120,000. Actual fixed costs for the month totaled $130,000. The Machining Department requires 70% of the peak-period capacity and the Fabrication Department requires 30%.
-How much (if any) of the electric power plant's actual fixed costs should not be allocated to the other departments?

Question

Manning Products, Inc., operates an electric power plant that provides all electrical power for the company's Machining and Fabrication Departments. Information on kwh of power usage in these departments for May follows:

The costs of the electric power plant are all fixed. The level of budgeted fixed costs is determined by the peak-period requirements. Budgeted fixed costs for May totaled $120,000. Actual fixed costs for the month totaled $130,000. The Machining Department requires 70% of the peak-period capacity and the Fabrication Department requires 30%.
-How much (if any) of the electric power plant's actual fixed costs should not be allocated to the other departments?

Quizplus · Accepted Answer

The Answer of Manning Products, Inc., operates an electric power plant that provides all electrical power for the company's Machining and Fabrication Departments. Information on kwh of power usage in these departments for May follows:

The costs of the electric power plant are all fixed. The level of budgeted fixed costs is determined by the peak-period requirements. Budgeted fixed costs for May totaled $120,000. Actual fixed costs for the month totaled $130,000. The Machining Department requires 70% of the peak-period capacity and the Fabrication Department requires 30%.
-How much (if any) of the electric power plant's actual fixed costs should not be allocated to the other departments?