Tasman Products, Ltd., 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 $ 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: 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: 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?

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 Actual $ 96,000+ $110,000 $150,000 $153,000 *Budgeted at $0.40 per machine-hour. Data for the Forming and Assembly Departments follow: Machine-Hours Percentage of Peak-Period Capacity Required 70% 30% Forming Department Assembly Department Total Budget 160,000 80,000 240,000 Actual 190,000 70,000 260,000 100% 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 Required 1 Required 2