Maintenance cost is allocated to the three producing departments based on the ma

Question

Maintenance cost is allocated to the three producing departments based on the machine hours used in each department. The maintenance cost for May was $100,000. The three departments had the following usage for May:

Department Machine hours used Direct labor hours used
Assembly 500 2,000
Fabrication 800 5,000
Testing 700 3,000

The maintenance cost that should be allocated to the Fabrication Department for May should be:

a. $25,000
b. $20,000
c. $50,000
d. $40,000


I'm reposting this question because i got four totally different answers with no explanation. I'm stuck because I dont see how to allocate the funds.

Explanation / Answer

d. $40,000 800/2000x100000

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