Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the companys 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 $ 364,800 $ 468,240 Fixed costs for salaries and other $ 212,000 $ 228,200 Budgeted at $24 per machine hour Data for the Forming and Assembly Departments follow Percentage of Peak Period Capacity Required Machine Hours Budget Actual Forming Department 70 10,200 12,200 Assembly Department 30 5,000 4,000 Total 100 15,200 16,200 The level of fixed costs in the Maintenance Department is determined by peak period 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 Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the companys 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 $ 364,800 $ 468,240 Fixed costs for salaries and other $ 212,000 $ 228,200 Budgeted at $24 per machine hour Data for the Forming and Assembly Departments follow Percentage of Peak Period Capacity Required Machine Hours Budget Actual Forming Department 70 10,200 12,200 Assembly Department 30 5,000 4,000 Total 100 15,200 16,200 The level of fixed costs in the Maintenance Department is determined by peak period 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

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Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the companys Forming Department and Assembly Department. The cost of this

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 $ 364,800* $ 468,240 Fixed costs for salaries and other $ 212,000 $ 228,200 *Budgeted at $24 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak-Period Capacity Required Machine-Hours Budget Actual Forming Department 70% 10,200 12,200 Assembly Department 30% 5,000 4,000 Total 100% 15,200 16,200 The level of fixed costs in the Maintenance Department is determined by peak-period 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?

Data for the Maintenance Department follow:

	Budget	Actual
Variable costs for lubricants	$ 364,800*	$ 468,240
Fixed costs for salaries and other	$ 212,000	$ 228,200

*Budgeted at $24 per machine-hour.

Data for the Forming and Assembly Departments follow:

	Percentage of Peak-Period Capacity Required	Machine-Hours
	Percentage of Peak-Period Capacity Required	Budget	Actual
Forming Department	70%	10,200	12,200
Assembly Department	30%	5,000	4,000
Total	100%	15,200	16,200

The level of fixed costs in the Maintenance Department is determined by peak-period 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?