Robert 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. Actual maintenance department costs are $36,000 fixed and $100,000 variable. Other relevant data follow:

Assembly Finishing
Capacity available 20,000 labor hours 15,000 labor hours
Capacity used 15,000 labor hours 9,000 labor hours

The amount of variable maintenance department costs allocated to the Assembly Department should be ?

$62,500

Explanation:

Budgeted variable cost /hr  = $5

Budgeted fixed cost  for maintenance = $30,000

Actual fixed cost = $36,000

Actual variable cost = $100,000

Assembly capacity = 20,000hrs

Actual capacity used = 15,000hrs

Finishing capacity =15,000 hrs

Actual capacity used = 9000 hrs

Assembly plant variable cost allocation = 15/24*100000

=$62,500

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best of luck,

the divergent