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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Definitions:

Customer Service

Assistance and advice provided by a company to those people who buy or use its products or services.

Supply Chain

The entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer, involving the production and delivery of a product or service from the supplier to the customer.

Artificial Intelligence

The simulation of human intelligence processes by machines, especially computer systems, enabling them to perform tasks that typically require human intelligence.

Watson

Watson is IBM's artificial intelligence platform that combines data analysis and intuitive reasoning capabilities, often used in solving complex problems across various industries.