Robert Company\'s power plant provides electricity to two producing departments.

ID: 2369320 • Letter: R

Question

Robert Company's power plant provides electricity to two producing departments. The annual budget for

the power plant shows the following:

Budgeted fixed costs $500,000

Budgeted variable costs per kilowatt hour $1

Actual annual costs incurred by the power plant were:

Actual fixed costs $215,000

Actual variable costs $350,000

Additional annual data follows:

Producing Department 1 Producing Department 2

Capacity available 250,000 kilowatt hours 150,000 kilowatt hours

Capacity used 270,000 kilowatt hours 165,000 kilowatt hours

Required:

A) Compute the amount of fixed costs allocated to each producing department.

B) Compute the amount of variable costs allocated to each producing department.

n Fixed costs are allocated to producing departments according to their original needs of support capacity.

Variable costs are allocated to producing departments based on their usage of the support department service.

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.