Actual versus Budgeted Costs Kumar, Inc., evaluates managers of producing departments on their ability to control costs. In addition to the costs directly traceable to their departments, each production manager is held responsible for a share of the costs of a support center, the Human Resources (HR) Department. The total costs of HR are allocated on the basis of actual direct labor hours used. The total costs of HR and the actual direct labor hours worked by each producing department are as follows: Year 1 Year 2 Direct labor hours worked: Department A 22,000 24,000 Department B 33,000 24,000 Total hours 55,000 48,000 Actual HR cost $150,000 $150,000 Budgeted HR cost 113,750 - 112,000 $0.25 per direct labor hour plus $100,000 Required: Allocate the HR costs to each producing department for Year 1 and Year 2 using the direct method with actual direct labor hours and actual HR costs. Year 1 Year 2 Department A Department B 1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent. per maintenance hour 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 if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments Assembly Department charge Fabricating Department charge Packaging Department charge Total amount charged