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

question 36

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 performance evaluation purposes, how much (if any) of the actual variable maintenance cost should not be allocated to the Fabrication and Assembly Departments at the end of the year?

• A)$1, 200
• B)$0
• C)$6, 600
• D)$22, 800

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Definitions:

John Adams

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