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Production Dept. A uses 30% of the Maintenance Dept. resources. Dept. A budgeted 70,000 machine hours and actually used 75,000 hours. The Maintenance Dept. variable cost rate was $5 per machine hour. Fixed costs were budgeted to be $400,000. Actual fixed costs were $450,000. Total Maintenance Dept. cost assigned to Dept. A for the year equals Blank______. Multiple choice question.

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Total Maintenance Dept. cost assigned to Dept. A for the year equals: $495,000.

Total Maintenance Dept. cost assigned to Dept. A

Using this formula

Total maintenance cost=(Actual machine hours× Variable cost rate per machine hour)+ (Fixed cost× % of maintenance dept)

Let plug in the formula

Total maintenance cost=(75,000 × $5) + ($400,000 × 30%)

Total maintenance cost =$375,000+$120,000

Total maintenance cost=$495,000

Therefore Total Maintenance Dept. cost assigned to Dept. A for the year equals: $495,000.

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