(Appendix 12B)Henry Company Has an Equipment Services Department Which Performs

question 17

Multiple Choice

(Appendix 12B) Henry Company has an Equipment Services department which performs all needed maintenance work on the equipment in the company's Fabrication and Assembly departments.Costs of the Equipment Services department are charged to the Fabrication and Assembly departments on the basis of direct labor-hours.Data on direct labor-hours for the most recent year follow: The company budgeted its variable maintenance costs at $16, 200 for the year.Actual variable maintenance costs totaled $22, 800. For purposes of measuring performance, how much variable maintenance cost should be charged to the Assembly Department at the end of the year?

• A)$12, 600
• B)$12, 160
• C)$11, 400
• D)$6, 600

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Cost of Goods Manufactured

The total production cost of goods that are completed and ready for sale during a specific period.

Income Statement

A financial document that reports a company's revenues, expenses, and profits over a specific period, showing how the revenues translate into net income.

Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity of a company at a specific point in time.