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Blossom Company has a Maintenance Department that services the equipment in only three operating departments: Cutting, Forming, and Painting Departments. The cost of this servicing
Blossom Company has a Maintenance Department that services the equipment in only three operating departments: Cutting, Forming, and Painting Departments. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Data relating to the Maintenance Department costs are below: Variable costs Fixed costs Actual $44,6831 $30,2001 Budgeted $45,000 $18,900 Data for the three operating departments follow: Cutting Forming Painting Budgeted Machine Hours 3,000 7,500 4,500 Actual Machine Hours 2,870 7,4901 4,350 Long-run average Machine Hours 2,800 7,2001 4,000 Q.) How much, if any, of the actual Maintenance Department costs should NOT be charged to the three operating departments for evaluation purposes? A) $
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