Question
Please do not Copy from Chegg. Write an original answer with an explanation. Tasman Products, Ltd., of Australia has a Maintenance Department that services the
Please do not Copy from Chegg. Write an original answer with an explanation.
Tasman Products, Ltd., 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 changed 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:
Particulars | Budget | Actual |
---|---|---|
Variable costs for lubricants | $96,000 | $110,000 |
Fixed costs for salaries and other | $150,000 | $153,000 |
Budgeted at $0.40 per machine-hour.
Data for the Forming and Assembly departments follow:
Particulars | Percentage of Peak-Period Capacity Required | Machine hours | |
---|---|---|---|
Budget | Actual | ||
Forming Department | 70% | 160,000 | 190,000 |
Assembly Department | 30% | 80,000 | 70,000 |
Total | 100% | 240,000 | 260,000 |
The level of fixed costs in the Maintenance Department is determined by peak-period requirements.
Required:
Please do not Copy from Chegg. Write an original answer with an explanation.
Management would like data to assist in comparing actual performance to planned performance in the Maintenance Department and in the other departments.
1. How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department?
Particulars | Forming department | Assembly department | Total |
---|---|---|---|
Variable costs | |||
Fixed costs | |||
Total cost charged |
2. Compute the amount of the actual Maintenance Department costs that should not be charged to the other departments?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started