PR AlgoLO Nicabrew has two production departments...
Nicabrew has two production departments that each produce one beverage: pinolillo and cacao. The maintenance department is a support department that provides services to both production departments. Support department costs are allocated to Pinolillo and Cacao departments on the basis of support department hours. The maintenance department has fixed costs of $ In addition, the maintenance department incurs a rate of $ per hour in variable costs. Budgeted and actual maintenance department hours in each production department are as follows:
tableProduction Department,Budgeted Hours,Actual HoursPinolilloCacaoTotalRequired:
tableQuestionAnswertablea If a singlerate cost allocation method is used, what amount of maintenance cost will bebudgeted for Pinolillo?$
