Fox Company Has the Following Data Concerning the Machine-Hours in Its

question 121

Multiple Choice

Fox Company has the following data concerning the machine-hours in its operating departments: Fixed costs of the maintenance department are budgeted at $30,000 per year. The fixed maintenance costs are incurred in order to service long-run average demand. The actual fixed maintenance cost was actually $32,000. How much fixed maintenance cost should be charged to Department B at the end of the year for performance evaluation purposes?

• A) $12,000
• B) $14,400
• C) $15,000
• D) $18,000

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Definitions:

Proprietorship

A type of business entity owned and operated by one individual, where there is no legal distinction between the owner and the business.

Owner's Equity

The amount of ownership interest in a business, represented by the company's assets minus its liabilities.

Statement of Owner's Equity

A financial document that details the changes in the equity of a company over a specific period, including investments, withdrawals, and earnings.

Owner's Equity

The ownership stake of shareholders or owners in a company's assets, after all debts have been subtracted.