Stumbo Company Has Two Production Departments, Cutting and Assembling, Served

question 38

Multiple Choice

Stumbo Company has two production departments, Cutting and Assembling, served by one maintenance department. Budgeted fixed costs for the maintenance department for 20X3 were $60,000, and the variable cost per labour hour was $2.00. Other relevant data for 20X3 are as follows:
Actual maintenance department costs for 20X3 were $64,000 fixed and $120,000 variable.
^*in labour hours
-The amount of fixed maintenance costs allocated to the Cutting Department should be

• A) $40,000.
• B) $24,000.
• C) $36,000.
• D) $28,000.

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Definitions:

Population Mean

The average of a set of characteristics or numbers in the entire population.

Standard Error

A statistical measure that describes the accuracy with which a sample distribution represents a population using standard deviation.

Economics Class

A course of study that examines the production, distribution, and consumption of goods and services, focusing on economic theories and principles.

Interval Estimate

An estimate of a population parameter that specifies a range within which the parameter is expected to lie.