Handy Inc. has a maintenance department that serves two operating departments, Cutting and Assembly. The maintenance department incurred $154,000 this year of which 30% was variable costs and the rest was fixed. Variable costs are allocated based on $1.25 per machine hour. Fixed costs are spread based on peak-period capacity of 100,000 machine in Cutting and 80,000 machine hours in Assembly. How much of the maintenance department will be charged to Assembly if they used 84,000 machine hours during the year (rounded to whole number)?
Handy Inc. has a maintenance department that serves two operating departments, Cutting and Assembly. The maintenance department incurred $154,000 this year of which 30% was variable costs and the rest was fixed. Variable costs are allocated based on $1.25 per machine hour. Fixed costs are spread based on peak-period capacity of 100,000 machine in Cutting and 80,000 machine hours in Assembly. How much of the maintenance department will be charged to Assembly if they used 84,000 machine hours during the year (rounded to whole number)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Handy Inc. has a maintenance department that serves two operating
departments, Cutting and Assembly. The maintenance department incurred
$154,000 this year of which 30% was variable costs and the rest was fixed.
Variable costs are allocated based on $1.25 per machine hour. Fixed costs are
spread based on peak-period capacity of 100,000 machine in Cutting and
80,000 machine hours in Assembly. How much of the maintenance
department will be charged to Assembly if they used 84,000 machine hours
during the year (rounded to whole number)?
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