Trenron,Inc

question 28

Essay

Trenron,Inc.has a maintenance department that provides services to the company's two operating departments.The variable costs of the maintenance department are charged on the basis of the number of maintenance hours logged in each department.Last year,budgeted variable maintenance costs were $8.60 per maintenance hour and actual variable maintenance costs were $8.75 per maintenance hour.
The budgeted and actual maintenance hours for each operating department for last year appear below: Required:
a.Compute the amount of variable maintenance department cost that should have been charged to each operating department at the end of the year for performance evaluation purposes.
b.Compute the amount of actual variable maintenance department cost that should not have been charged to the operating departments at the end of the year for performance evaluation purposes.

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Definitions:

Labor Force

The labor force comprises all the working-age people in an economy who are either employed or actively looking for work.

Monopsony

A market condition where there is only one buyer for a product or service, giving the buyer significant power over prices and terms of sale.

Collective Bargaining

The process by which employers and a group of employees negotiate wages, working conditions, and other employment terms.

Strikes

A work stoppage caused by the mass refusal of employees to work, usually in protest against work conditions, pay levels, or company policies.