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linda_us, Master's Degree
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Samuel Company has two production departments, Mixing and Finishing,

Resolved Question:

Samuel Company has two production departments, Mixing and Finishing, served by one maintenance department. Budgeted fixed costs for the maintenance department were $40,000, and the variable cost per labor hour was $4.00. Other relevant data are as follows:
Mixing Finishing

Long-run capacity available* 18,000 12,000
Budgeted* 12,000 10,500
Actual* 15,000 9,000

*in labor hours

Actual maintenance department costs were $36,000 fixed and $100,000 variable. The amount of fixed maintenance costs allocated to the Mixing Department should be _____.
Submitted: 5 years ago.
Category: Business and Finance Homework
Expert:  linda_us replied 5 years ago.
Thanks for requesting me.

Is this a Multiple choice. If yes, please provide the options.

Regards


Linda
Customer: replied 5 years ago.

not multiple choice

 

 

im not sure about my answer plz see below

 

actul* cost per labor hour = total

 

15000 * 4 = $6000

 

$60000 - 436000 = $24000

 

regards

bader

Expert:  linda_us replied 5 years ago.
The answer would be 24000 but it will not be calculated as above.

The fixed cost should be allocated using long run capacity and the budgeted fixed cost.

So the Answer would be (18000/(18000+12000))*40000 = $24000


Whenever you are requesting me please write "FOR LINDA" in front of your post.

Regards

Linda
linda_us and other Business and Finance Homework Specialists are ready to help you
Customer: replied 5 years ago.

THANK YOU LINDA

 

REGARDS

BADER

Expert:  linda_us replied 5 years ago.
Your are welcome.

Regards

Linda

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