Fixed Costs Budgeted for Caldwell Company's Maintenance Department for the Year

question 35

Multiple Choice

Fixed costs budgeted for Caldwell Company's Maintenance Department for the year totaled $480,000; actual fixed costs for the year totaled $510,000. The level of budgeted fixed costs is determined by peak-period requirements. The Milling Department requires 1/3 of the peak-period capacity and the Assembly Department requires 2/3.
-How much of the actual fixed maintenance cost for the year should be kept in the Maintenance Department and not allocated to the other departments for performance evaluation purposes?

• A)$0
• B)$30,000
• C)$90,000
• D)$85,000

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Definitions:

Financial Incentives

Monetary benefits provided to influence behaviors or decisions, often used in business and policy-making to achieve specific outcomes.

Commodification

The process by which something is turned into a commodity, making it marketable and valued in terms of its economic worth.

Nursing Home Residents

Individuals who live in specialized facilities that provide round-the-clock nursing care and assistance with everyday activities.