Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: Budgeted kwh Actual kwh The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%. Multiple Choice For performance evaluation purposes, how much of the electric power plant's fixed costs should be charged to the Fabrication department at the end of the month for purposes of evaluating performance? $18,000 $24,000 Machining Fabrication 20,000 10,000 25,000 15,000 $30,000 Total 30,000 40,000 $26,000

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and
Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow:
Budgeted kwh
Actual kwh
The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period
requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the
Fabrication Department requires 40%.
Multiple Choice
For performance evaluation purposes, how much of the electric power plant's fixed costs should be charged to the Fabrication department at
the end of the month for purposes of evaluating performance?
$18,000
$24,000
Machining Fabrication
20,000
10,000
25,000
15,000
$30,000
Total
30,000
40,000
$26,000
Transcribed Image Text:Mannerman Products, Incorporated, operates an electric power plant which provides all electrical power for the company's Machining and Fabrication departments. Information on kilowatt-hours (kwh) of power usage in these departments for May follow: Budgeted kwh Actual kwh The costs of the electric power plant are all fixed. Budgeted fixed costs for May totaled $60,000 and are determined by peak-period requirements. Actual fixed costs for the month totaled $65,000. The Machining Department requires 60% of the peak-period capacity and the Fabrication Department requires 40%. Multiple Choice For performance evaluation purposes, how much of the electric power plant's fixed costs should be charged to the Fabrication department at the end of the month for purposes of evaluating performance? $18,000 $24,000 Machining Fabrication 20,000 10,000 25,000 15,000 $30,000 Total 30,000 40,000 $26,000
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