Todd 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. Other relevant data follow:

Assembly Finishing

Capacity available20,000 labor hours15,000 labor hours

Capacity used15,000 labor hours9,000 labor hours

Actual maintenance department costs:

Fixed$36,000

Variable$100,000

The amount of variable maintenance department costs allocated to the Finishing Department should be .

A) $37,500

B) $42,000

C) $45,000

D) $75,000

A) $37,500

Explanation:

The computation of the  variable maintenance department costs allocated to the Finishing Department is shown below:

= Variable actual maintenance department costs × labor hours ÷ total labor hours

= $100,000 × 9,000 labor hours ÷ 24,000 labor hours

= $37,500

The total labor hours is

= 15,000 labor hours + 9,000 labor hours

= 24,000 labor hours

We simply applied the above formula

answer; by looking at total product,marginal product,and changes in both after changes in inputs

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best of luck,

the divergent