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hces Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the company's Forming Department and Assembly Department. The cost of
hces Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance Department and to the other two departments for the most recent year are presented below. Data for the Maintenance Department follow: Budget Actual Variable costs for Lubricants $ 340,400 $ 436,520 Fixed costs for salaries and other $ 209,000 $ 224,900 Budgeted at $23 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage Machine Hours of Peak- Period Capacity Required Budget Actual Forning Department 735 9,800 11,800 Assembly Department 27 5,000 4,000 Total 1009 14,800 15,800 The level of fixed costs in the Maintenance Department is determined by peak perlod requirements. Required: 1. How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department? 2. How much, If any of the actual Maintenance Department costs for the year should be treated as a spending variance and not charged to the Forming and Assembly departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department? Forming Assembly Department Department Total cost charged Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the actual Maintenance Department costs for the year should be treated as a spending variance and not charged to the Forming and Assembly departments? Sponding variance Required 1
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