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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)?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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)?
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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