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

Multiple Choice

Australia 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 $4.00. Other relevant data are as follows: $$\begin{array}{l}\begin{array} { l l l } & \text { Mixing } & \text { Finishing } \\\text { Long-run capacity av ail able* } & 18,000 & 12,000 \\\text { Budgeted } & 12,000 & 10,500 \\\text { Actual } ^ { * } & 15,000 & 9,000\end{array}\\\text { *in labor hours }\end{array}$$ Actual maintenance department costs were $36,000 fixed and $100,000 variable. The amount of variable maintenance costs allocated to the Finishing Department should be:

A) $36,000
B) $37,500
C) $48,000
D) $42,000