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1688 Company has two production departments called Assembly and Finishing. The maintenance department serves both production departments. Maintenance costs are allocated based on labor hours.
1688 Company has two production departments called Assembly and Finishing. The maintenance department serves both production departments. Maintenance costs are allocated based on labor hours. Budgeted fixed costs for the maintenance department are $30,000. Budgeted variable costs for the maintenance department are $5.00 per labor hour. Other relevant data follow Finishing Capacity available Capacity used Actual maintenance department costs Fixed $36,000 Variable $100,000 20,000 labor hours 15.000 labor hours The amount of variable maintenance department costs allocated to the Finishing Department should be, A $37,500 $45,000 Oc. $75,000 OD. $42,000 Assembly 15,000 labor hours 9.000 labor hours
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