An actual charging rate is frequently used to charge the Maintenance Department cost to departments using its

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An actual charging rate is frequently used to charge the Maintenance Department cost to departments using its services. The charge is determined by multiplying the number of hours of maintenance service actually provided times a billing rate. The billing rate is computed by dividing total actual Maintenance Department cost by total actual maintenance hours worked. The supervisor of the Stamping Department was upset by a $15,000 maintenance charge for work that involved approximately the same number of labor hours as work done in a previous month when the charge was $ 12,000.
(a) What factors may have caused the increased charge?
(b) What improvements can be made in the distribution of this company's Maintenance Department cost?
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Cost Accounting

ISBN: 978-0759338098

14th edition

Authors: William K. Carter

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