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

question 36

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:

Acquisition Transaction

A deal or arrangement where one company takes control of or purchases significant assets or shares of another company, leading to a change in ownership structure.

Fair Values

The potential earning from disposing of an asset or the fiscal responsibility to transition a liability in an agreeably organized interaction with market entities at the moment of judgement.

Common Stock

Equity shares representing ownership in a company, giving holders voting rights and a share in the company’s profits through dividends.

Goodwill

An intangible asset that arises when a company acquires another for a price higher than the fair value of its net assets, representing items such as brand reputation or customer loyalty.