The expected costs for the Maintenance Department of Greenwich Manufacturing, Inc., for the coming year include: The
Question:
The expected costs for the Maintenance Department of Greenwich Manufacturing, Inc., for the coming year include:
The Assembly and Packaging departments expect to use maintenance hours relatively evenly throughout the year. The Fabricating Department typically uses more maintenance hours in the month of November. Estimated usage in hours for the year and for the peak month are as follows:
Required:
1. Calculate a variable rate for the Maintenance Department. Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours.
2. Use the two rates to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year.
3. What ifthe Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?LO1
Step by Step Answer:
Introduction To Cost Accounting
ISBN: 9780538749633
1st International Edition
Authors: Don R. Hansen, Maryanne Mowen, Liming Guan, Mowen/Hansen