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\mathrm{.}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 $4,500390$

Fabricating Department $6,7001,300$

Packaging Department $10,800910$

Total maintenance hours $22,0002,600$

Actual usage for the year by:

Assembly Department $3,960$

Fabricating Department $6,800$

Packaging Department $10,000$

Total maintenance hours $20,760$

Required:

$1.$ Calculate a variable rate for the Maintenance Department. Round your answer to the nearest cent.

$fill in the blank $1$ per maintenance hour

Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours.

Department Peak Number of Hours Allocated Fixed Cost

Assembly fill in the blank $2$ $fill in the blank $3$

Fabricating fill in the blank $4$ fill in the blank $5$

Packaging fill in the blank $6$ fill in the blank $7$

Total fill in the blank $8$ $fill in the blank $9$

$2.$ 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.

Assembly $fill in the blank $10$

Fabricating fill in the blank $11$

Packaging fill in the blank $12$

Total $fill in the blank $13$

$3.$ 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 $fill in the blank $14$

Fabricating fill in the blank $15$

Packaging fill in the blank $16$

Total $fill in the blank $17$