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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

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:

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1. How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department?

Forming Department Assembly Department
Total cost charged

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
Check my work 3 Problem 11B-5 Service Department Charges [L011-6] Tasman Products, Ltd., of Australla 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. 10 points Data for the Maintenance Department follow eBook Budget $279,300 $190,000 Actual $357,090 $204,000 Variable costs for lubricants Fixed costs for salaries and other Print Budgeted at $19 per machine-hour Data for the Forming and Assembly Departments follow: References ercentage of Peak-Period Machine-Hours Capacity Required 668 Budget 9,600 5,100 Actual 11,600 Forming Department Assembly Department 34% 4,100 15,700 1008 14,700 Total 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

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