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Nathan Company has an Equipment Services Department that performs all needed maintenance work on the...

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Accounting

Nathan Company has an Equipment Services Department that performs all needed maintenance work on the equipment in the company's Fabrication and Assembly Departments. Cost of the equipment Services Department are allocated to the Fabrication and Assembly Departments on the basis of direct labor-hours. Data for the year just completed follow:

Fabriccation Assemly Total
Budgeted direct labor-hours 20,000 60,000 80,000
Actual direct labor-hours 30,000 70,000 100,000
Peak-period direct labor hours 40,000 80,000 120,000

For the year just ended, the company budgeted its variable maintenance costs at $200,000 for the year. Actual variable maintenance costs for the year totaled $275,000.

1) How much of the $275,000 of actual variable maintenance cost should be allocated to the Assembly Department at the end of the year just ended for purposes of measuring performance?

a. $175,000.

b. $116,900.

c. $192,500.

d. $150,000.

The answer is A. Please show all steps

2)

How much (if any) of the $275,000 in variable maintenance cost should NOT be allocated to the Fabrication and Assembly Departments?

a. $0.

b. $75,000.

c. $25,000.

d. $108,000.

The answer is C. Please show all steps.

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