Todd Company Has Two Production Departments Called Assembly and Finishing

question 13

Multiple Choice

Todd Company has two production departments called Assembly and Finishing.The maintenance department serves both production departments.Maintenance costs are allocated based on labor hours.Budgeted fixed costs for the maintenance department are $30,000.Budgeted variable costs for the maintenance department are $5.00 per labor hour.Other relevant data follow:
$$\begin{array} { l l l } & \text { Assembly } & \text { Pinishing } \\\text { Capacity available } & 20,000 \text { labor hours } & 15,000 \text { labor hours } \\\text { Capacity used } & 15,000 \text { labor hours } & 9,000 \text { labor hours }\end{array}$$
Actual maintenance department costs:
$\begin{array}{ll}\text { Fixed } & \$ 36,000 \\\text { Variable } & \$ 100,000\end{array}$
The amount of variable maintenance department costs allocated to the Finishing Department should be ________.

• A) $37,500
• B) $42,000
• C) $45,000
• D) $75,000

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