Question
Cornerstone Exercise 7.1 (Algorithmic) Calculating and Using a Single Charging Rate The expected costs for the Maintenance Department of Stazler, Inc., for the coming year
Cornerstone Exercise 7.1 (Algorithmic) Calculating and Using a Single Charging Rate
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:
Fixed costs (salaries, tools): $71,680 per year |
Variable costs (supplies): $1.30 per maintenance hour |
Estimated usage by: | |
Assembly Department | 5,000 |
Fabricating Department | 6,000 |
Packaging Department | 11,400 |
Total maintenance hours | 22,400 |
Actual usage by: | |
Assembly Department | 3,500 |
Fabricating Department | 6,100 |
Packaging Department | 10,600 |
Total maintenance hours | 20,200 |
Required:
1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent. $ per maintenance hour
2. Use this rate 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 3,550 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 | $ |
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