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Calculating and Using Dual Charging Rates The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools):

Calculating and Using Dual Charging Rates

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:

Fixed costs (salaries, tools): $64,900 per year

Variable costs (supplies): $1.35 per maintenance hour

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 is as follows:

Yearly Hours Monthly Peak Hours
Assembly Department 4,500 390
Fabricating Department 6,700 1,300
Packaging Department 10,800 910
Total maintenance hours 22,000 2,600

Actual usage for the year by:

Assembly Department 3,960
Fabricating Department 6,800
Packaging Department 10,000
Total maintenance hours 20,760

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?

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