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Tasman Products has a Maintenance Department that services equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments based on machine-hours. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 379,200* $ 213,000 Actual $ 486,960 $ 229,300 *Budgeted at $24 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Period Capacity Machine-Hours Required Budget Actual Forming Department Assembly Department 70% 10,400 12,400 Total 30% 100% 5,400 4,400 15,800 16,800 The amount 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 Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Spending variance < Required 1 Required 2

Tasman Products has a Maintenance Department that services equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments based on machine-hours. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 379,200* $ 213,000 Actual $ 486,960 $ 229,300 *Budgeted at $24 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Period Capacity Machine-Hours Required Budget Actual Forming Department Assembly Department 70% 10,400 12,400 Total 30% 100% 5,400 4,400 15,800 16,800 The amount 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 Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Spending variance < Required 1 Required 2

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...
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Tasman Products has a Maintenance Department that services equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments based on machine-hours. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 379,200* $ 213,000 Actual $ 486,960 $ 229,300 *Budgeted at $24 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Period Capacity Machine-Hours Required Budget Actual Forming Department Assembly Department 70% 10,400 12,400 Total 30% 100% 5,400 4,400 15,800 16,800 The amount 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 Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Spending variance < Required 1 Required 2
Transcribed Image Text:Tasman Products has a Maintenance Department that services equipment in the company's Forming Department and Assembly Department. The cost of this servicing is charged to the operating departments based on machine-hours. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other Budget $ 379,200* $ 213,000 Actual $ 486,960 $ 229,300 *Budgeted at $24 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Period Capacity Machine-Hours Required Budget Actual Forming Department Assembly Department 70% 10,400 12,400 Total 30% 100% 5,400 4,400 15,800 16,800 The amount 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 Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the Maintenance Department's actual costs should be treated as a spending variance and not charged to the Forming and Assembly departments? Spending variance < Required 1 Required 2
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