Question
The companys Maintenance Department provides services to the company's two operating divisions, Divisions A and B. The variable costs of the Maintenance Department are budgeted
The companys Maintenance Department provides services to the company's two operating divisions, Divisions A and B. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments during the peak period. Data appear below:
Maintenance Department: |
|
Budgeted variable cost | $2 per case |
Budgeted total fixed cost | $1,134,000 |
Actual total variable cost | $239,400 |
Actual total fixed cost | $1,157,980 |
|
|
Division A: |
|
Percentage of peak period capacity required | 30% |
Budgeted cases | 29,000 |
Actual cases | 29,040 |
|
|
Division B: |
|
Percentage of peak period capacity required | 70% |
Budgeted cases | 85,000 |
Actual cases | 84,948 |
For performance evaluation purposes, how much Maintenance Department cost should be charged to Division B at the end of the year?
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