Unit Cost, No Work-In-Process Inventories

Lising Therapy has a physical therapist who performs electro-mechanical treatments for its patients. During April, Lising had the following cost and output information:

Direct materials	$900
Hygienist's salary	$4,200
Overhead	$4,000
Number of treatments	100

Required:

1. Calculate the cost per treatment for April. $ per treatment

2. Calculate the cost of services sold for April. $

3. What if Lising found a way to reduce overhead costs by 20 percent? How would this affect the profit per treatment? Profit would be - Select your answer -increaseddecreasedItem 3

by $ per treatment

2-The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:

Fixed costs (salaries, tools): $63,600 per year

Variable costs (supplies): $1.40 per maintenance hour

Estimated usage by:
Assembly Department	4,600
Fabricating Department	6,000
Packaging Department	10,600
Total maintenance hours	21,200
Actual usage by:
Assembly Department	3,500
Fabricating Department	6,100
Packaging Department	9,800
Total maintenance hours	19,400

Required:

1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent. $ per maintenance hour

2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. $

3. What if the Assembly Department used 3,550 maintenance hours in the year? How much would have been charged out to the three departments?

Assembly Department charge	$
Fabricating Department charge
Packaging Department charge
Total amount charged	$