Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 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 $ 266,400*Footnote asterisk $ 340,320
Fixed costs for salaries and other $ 218,000 $ 234,800

*Footnote asteriskBudgeted at $18 per machine-hour.

Data for the Forming and Assembly Departments follow:

Percentage of Peak-Period Capacity Required Machine-Hours
Budget Actual
Forming Department 68% 9,900 11,900
Assembly Department 32% 4,900 3,900
Total 100% 14,800 15,800

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?

image text in transcribed image text in transcribed

Complete this question by entering your answers in the tabs below. How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department? Complete this question by entering your answers in the tabs below. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Auditing Fundamentals And Techniques

Authors: J. Ladd Greeno

2nd Edition

091509410X, 978-0915094103

More Books

Students also viewed these Accounting questions

Question

What are two potential causes of non-GAAP accounting?

Answered: 1 week ago

Question

Describe the process of report preparation.

Answered: 1 week ago

Question

6. Explain the strengths of a dialectical approach.

Answered: 1 week ago