Accounting 9706 · AS & A Level · Traditional costing methods

Traditional costing methods — practice question

A manufacturing business operates two production departments: assembly and painting. The information below is given. Assembly: machinery with a net book value of $150 000; machinery repair costs of $14 000; machine operating hours of 60 000; number of machines 30. Painting: machinery with a net book value of $100 000; machinery repair costs of $6000; machine operating hours of 15 000; number of machines 10. The total machinery insurance cost for the year amounted to $5000. What amount of insurance should be allocated to the assembly department?

  • A$3000
  • B$3500
  • C$3750
  • D$4000

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