Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 11B-5 Service Department Charges [LO11-6] Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the company's Forming Department and
Problem 11B-5 Service Department Charges [LO11-6] 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 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: Variable costs for lubricants Fixed costs for salaries and other Budget $ 302,000 $184,000 Actual $386,600 $197,400 *Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow: Machine-Hours - Forming Department Assembly Department Total Percentage of Peak-Period Capacity Required 63% 37% 100% Budget 10,300 4,800 15,100 Actual 12,300 3,800 16,100 The level of fixed costs in the Maintenance Department is determined by peak-period requirements Required: 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? 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? 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 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
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