Allocation of Fixed Maintenance Costs
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Fixed costs budgeted for Caterton's Maintenance Department for last year totaled $280,000; actual fixed costs for the year totaled $308,000. The level of budgeted fixed costs is determined by peak-period requirements. The Milling Department requires 15/35 of the peak-period capacity and the Assembly Department requires 20/35.
How much fixed maintenance cost should be allocated to the Milling department at the beginning of the year for flexible budget planning purposes?
A) $145,600 C) $132,000
B) $120,000 D) $140,000
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Solution Summary
This explains the allocation under flexible budgeting.
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