Ampulla Production Studios charges the Sound Effects Department\'s costs to two

Question

Ampulla Production Studios charges the Sound Effects Department's costs to two operating departments, Audio and Video. Charges are made on the basis of labor-hours. Information pertaining to the labor-hours for the year follow:

Audio video

BUDGET LABOR HOUR FOR YEAR $18000 $27000

ACTUAL LABOR HOURS FOR YEAR $14700 $27300

ANUAL LONG-RUN AVERAGE CAPACITY IN LABOR HOURS $15000 $25000

The following cost pertain to the sound effect department

Budgeted for year Actual for year

Variable cost $315000 $273000

Fixed cost $756000 $819000

1-How much of the Sound Effects Department's variable cost should be charged to the Video Department at yearend for performance evaluation purposes? A. $175,000 B. $175,500 C. $177,450 D. $191,100 E. None of the above

2-How much of the Sound Effects Department's fixed cost should be charged to the Audio department at year-end for performance evaluation purposes? A. $264,600 B. $283,500 C. $302,400 D. $307,125 E. None of the above

Explanation / Answer

Ampulla Production Studios charges the Sound Effects Department's costs to two

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