Gibson Company Has Two Production Departments, Mixing and Finishing, Served

Multiple Choice

Gibson Company has two production departments, Mixing and Finishing, served by one maintenance department.Budgeted fixed costs for the maintenance department were $30,000, and the variable cost per labor hour was $5.00.Other relevant data are as follows: $\begin{array}{lrr}& \text { Mixing } & \text { Finishing } \\\text { Long-run capacity available* } & 20,000 & 15,000 \\\text { Budgeted* } & 12,000 & 10,500 \\\text { Actual* } & 15,000 & 9,000\end{array}$ *in labor hours Actual maintenance department costs were $36,000 fixed and $100,000 variable.The amount of variable maintenance costs allocated to the Mixing Department should be _____.

A) $75,000
B) $72,000
C) $48,000
D) $62,500