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Cool Guy Company has a Maintenance Department that services the equipment in only three operating departments: Cutting, Forming, and Painting Departments. The cost of this
Cool Guy 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 $27,400 Data for the three operating departments follow: Budgeted Machine-Hours Actual Machine Hours Long-run average Machine Hours Cutting 3,000 2,870 2,800 Forming 7,500 7,4901 7,2001 Painting 4,500 4,350 4,000 Q) How much, if any, of the actual Maintenance Department costs should NOT be charged to th three operating departments for evaluation purposes? A) $Step by Step Solution
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