The Cost of Operating the Quality Control Department of Strongsville

question 113

Essay

The cost of operating the Quality Control Department of Strongsville Manufacturing includes $850,000 of fixed costs and $550,000 of variable costs.The department normally budgets 20,000 inspection hours a year.Two departments, Fabrication and Assembly, receive quality control checks.Fabrication is budgeted at 1,000 hours a month, while Assembly is budgeted the remainder.In August, Fabrication used 1,200 inspection hours and Assembly used 900 hours.
How much did each department receive in quality control costs, assuming a single rate is used based on budgeted hours?

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Definitions:

Collection Indorsement

An endorsement on a negotiable instrument, such as a check or promissory note, that specifies the particular person to whom the payment is to be made.

Fictitious Payee Rule

A principle in commercial law that protects the drawer of a check if the check is made payable to a non-existent or not intended recipient, under certain conditions.

Bookkeeper

A person responsible for recording the financial transactions and maintaining the financial records of a business.

Negotiable Instruments

Written documents that guarantee the payment of a specific amount of money to the bearer or to a specific person, under certain conditions.