The Following Information Pertains to Famous Company Famous Company Does Not Divide Costs into Fixed and Variable

question 91

Multiple Choice

The following information pertains to Famous Company: $$\begin{array} { | l | c | c | c | c | } \hline & { \text { Support Departments } } && { \text { Producing Departments } } \\\hline & \text { Personnel } & \text { Maintenance } & \text { Fabrication } & \text { Assembly } \\\hline \text { Budgeted overhead } & \$ 40,000 & \$ 72,000 & \$ 140,000 & \$ 160,000 \\\hline \text { Direct 1abor hours } & 2,000 & 2,500 & 8,000 & 10,000 \\\hline \text { Machine hours } & - & - & 12,000 & 8,000 \\\hline \text { Number of employees } & 4 & 5 & 15 & 25 \\\hline\end{array}$$ Famous Company does not divide costs into fixed and variable components. Personnel costs are allocated based on the number of employees, and maintenance costs are allocated based on machine hours.
Predetermined overhead rates for fabrication and assembly are based on direct labor hours.
What is the amount of maintenance costs allocated to the Assembly Department using the direct method? (Round amounts to dollars.)

• A)$14,400.
• B)$48,000.
• C)$28,800.
• D)$38,160.

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