Fox Company has the following data concerning the machine-hours in its operating

Question

Fox Company has the following data concerning the machine-hours in its operating departments: Fixed costs of the maintenance department ore budgeted at $30,000 per year. The fixed maintenance costs are incurred in order to service long-run average demand. The actual fixed maintenance cost was actually $32,000. How much fixed maintenance cost should be charged to Department B at the end of the year for performance evaluation purposes? $12,000 $14,400 $15,000 $18,000 Community Hospital has a Food Services Department that provides meals for all patients in the hospital. Budgeted and actual meals served for the month just ended are: Pediatrics Department Surgical Department Total meals The budgeted variable cost of meals for the month just ended was $I .25 per meal; the actual variable cost of meals for the month was $130,000. How much of the $I 30,000 actual Food Services cost for the month just completed should be kept in the Food Services Department and not charged to the other departments? $30,000 $5,000 $4,000 $0

Explanation / Answer

Solution:

Question 13

Department A Department B Department C Total Budgeted Hours 10,000 30,000 20,000 60,000 Per hour Rate = Budgeted Fixed overheads / Total Hours 0.5 Overheads charged 5,000 15,000 10,000 30,000 Therefore, the answer to the above question is C. $ 15,000

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