Ghia Manufacturing Corporation charges its Maintenance Department's service costs to two operating departments, Fabrication and Assembly. Charges are made on the basis of machine-hours. Information pertaining to machine-hours for the year follows: Fabrication 40,000 45,000 Budgeted machine-hours for the year Actual machine-hours for the year Percentage of peak-period capacity The following costs pertain to the Maintenance Department: Variable costs Fixed costs Budgeted For Actual For Year Year $ 200,000 $ 240,000 $ 500,000 $ 450,000 23.2% Assembly 120,000 105,000 76.8% For performance evaluation purposes, how much of the Maintenance Department's variable cost should be charged to the Fabrication Departme at year-end?
Ghia Manufacturing Corporation charges its Maintenance Department's service costs to two operating departments, Fabrication and Assembly. Charges are made on the basis of machine-hours. Information pertaining to machine-hours for the year follows: Fabrication 40,000 45,000 Budgeted machine-hours for the year Actual machine-hours for the year Percentage of peak-period capacity The following costs pertain to the Maintenance Department: Variable costs Fixed costs Budgeted For Actual For Year Year $ 200,000 $ 240,000 $ 500,000 $ 450,000 23.2% Assembly 120,000 105,000 76.8% For performance evaluation purposes, how much of the Maintenance Department's variable cost should be charged to the Fabrication Departme at year-end?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vishnu
Transcribed Image Text:Ghia Manufacturing Corporation charges its Maintenance Department's service costs to two operating departments, Fabrication and Assembly.
Charges are made on the basis of machine-hours. Information pertaining to machine-hours for the year follows:
Budgeted machine-hours for the year
Actual machine-hours for the year
Percentage of peak-period capacity
The following costs pertain to the Maintenance Department:
Variable costs.
Fixed costs
Multiple Choice
O
O
O
For performance evaluation purposes, how much of the Maintenance Department's variable cost should be charged to the Fabrication Department
at year-end?
$36,000
$46,400
$50,000
Fabrication
40,000
45,000
Budgeted For
Year
$ 200,000
$ 500,000
$56,250
Actual For
Year
$ 240,000
$ 450,000
23.2%
Assembly
120,000
105,000
76.8%
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