Compute the amount of fixed costs


Response to the following problem:

Robert Company's power plant provides electricity to two producing departments. The annual budget for the power plant shows the following:

Budgeted fixed costs $500,000

Budgeted variable costs per kilowatt hour $1

Actual annual costs incurred by the power plant were:

Actual fixed costs $215,000

Actual variable costs $350,000

Additional annual data follows:

                                 Producing Department 1                      Producing Department 2

Capacity available             250,000 kilowatt hours                  150,000 kilowatt hours

Capacity used                  270,000 kilowatt hours                  165,000 kilowatt hours

Required:

A) Compute the amount of fixed costs allocated to each producing department.

B) Compute the amount of variable costs allocated to each producing department.

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Cost Accounting: Compute the amount of fixed costs
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