The Cost of Operating the Quality Control Department of Ames

question 84

Essay

The cost of operating the quality control department of Ames Manufacturing includes $608,000 of fixed costs and $400,000 of variable costs. The department normally budgets 21,000 inspection hours a year. Two departments receive quality control checks, fabrication and assembly. Fabrication is budgeted at 1,000 hours a month, while assembly is budgeted the remainder.
Required:
a. In July, fabrication used 1,000 inspection hours and assembly used 800 hours. How much did each department receive in quality control costs assuming a single rate is used based on budgeted hours?
b. In August, fabrication used 1,200 inspection hours and assembly used 900 hours. How much did each department receive in quality control costs assuming a dual rate is used with budgeted usage for fixed costs and actual usage for variable costs?

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Definitions:

Cell Cycle

A series of events that take place in a cell leading to its division and duplication, consisting of interphase (G1, S, G2) and mitotic phase.

Cytoplasmic Division

The process, also known as cytokinesis, during which the cytoplasm of a parental cell divides to form two daughter cells.

Nuclear Division

The process by which a nucleus divides, resulting in the segregation of the genome to two daughter nuclei. This occurs via mitosis or meiosis.

Proto-oncogenes

Normal genes that can become oncogenes if mutated or expressed at high levels, potentially leading to cancer.