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Problem 11-18 (Algo) Service Department Charges (LO11-4) Joe Biden Ltd. 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 $347,300 $445,490 Fixed costs for salaries and other $217,000 $233,700 "Budgeted at $23 per machine-hour. Data for the Forming and Assembly Departments follow: Machine-Hours Percentage of Peak Period Capacity Required 62 386 1008 Forming Department Assembly Department Total Budget 10,100 5,000 15,100 Actual 12,100 4.000 16,100 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? Forming Department Assembly Department Total Peak Period Capacity Required 628 388 100% Budget 10,100 5,000 15,100 Actual 12,100 4,000 16,100 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? 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 RE Required 2 Data for the Forming and Assembly Departments follow: Machine-Hours Forming Department Assembly Department Total Percentage of Peak-Period Capacity Required 624 384 100% Budget 10,100 5,000 15,100 Actual 12,100 4,000 16,100 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, 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? Spending variance
