Matrix Company has a Maintenance Department that maintains the machines in depar

Question

Matrix Company has a Maintenance Department that maintains the machines in departments A and B. Next year Department A is budgeted to have 6,000 machine-hours of activity and Department B is budgeted to have 24,000 machine-hours. Fixed costs in the Maintenance Department are budgeted at $60,000 per year and are incurred in order to support peak period activity. Department A requires 25% of the peak period capacity and Department B requires 75% of the peak period capacity. How much of the fixed cost of the Maintenance Department should be charged to Department B?


a. $45,000

b. $30,000

c. $48,000

d. $60,000

Explanation / Answer

0.75*60,000 = 45,000 answer: a, $45,000

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