The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): $67,260 per year Variable costs (supplies): $1.45 per maintenance hour The Assembly and Packaging departments expect to use maintenance hours relatively evenly throughout the year. The Fabricating Department typically uses more maintenance hours in the month of November. Estimated usage in hours for the year and for the peak month is as follows: Yearly hours Monthly Peak Hours Assembly Department 5,000 345 Fabricating Department 6,700 1,150 Packaging Department 11,100 805 Total maintenance hours 22,800 2,300 Actual usage for the year by: Assembly Department 3,750 Fabricating Department 6,800 Packaging Department 10,300 Total maintenance hours 20,850 Required: 1. Calculate a variable rate for the Maintenance Department. Round your answer to the nearest cent. $fill in the blank 1 per maintenance hour Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours. Round your answers to the nearest dollar. Department Peak Number of Hours Allocated Fixed Cost Assembly fill in the blank 2 $fill in the blank 3 Fabricating fill in the blank 4 fill in the blank 5 Packaging fill in the blank 6 fill in the blank 7 Total fill in the blank 8 $fill in the blank 9 2. Use the two rates 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. Round your answers to the nearest dollar. Assembly $fill in the blank 10 Fabricating fill in the blank 11 Packaging fill in the blank 12 Total $fill in the blank 13 3. What if the Assembly Department used 3,800 maintenance hours in the year? How much would have been charged out to the three departments? Round your answers to the nearest dollar. Assembly $fill in the blank 14 Fabricating fill in the blank 15 Packaging fill in the blank 16 Total $fill in the blank 17

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): $67,260 per year Variable costs (supplies): $1.45 per maintenance hour The Assembly and Packaging departments expect to use maintenance hours relatively evenly throughout the year. The Fabricating Department typically uses more maintenance hours in the month of November. Estimated usage in hours for the year and for the peak month is as follows: Yearly hours Monthly Peak Hours Assembly Department 5,000 345 Fabricating Department 6,700 1,150 Packaging Department 11,100 805 Total maintenance hours 22,800 2,300 Actual usage for the year by: Assembly Department 3,750 Fabricating Department 6,800 Packaging Department 10,300 Total maintenance hours 20,850 Required: 1. Calculate a variable rate for the Maintenance Department. Round your answer to the nearest cent. $fill in the blank 1 per maintenance hour Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours. Round your answers to the nearest dollar. Department Peak Number of Hours Allocated Fixed Cost Assembly fill in the blank 2 $fill in the blank 3 Fabricating fill in the blank 4 fill in the blank 5 Packaging fill in the blank 6 fill in the blank 7 Total fill in the blank 8 $fill in the blank 9 2. Use the two rates 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. Round your answers to the nearest dollar. Assembly $fill in the blank 10 Fabricating fill in the blank 11 Packaging fill in the blank 12 Total $fill in the blank 13 3. What if the Assembly Department used 3,800 maintenance hours in the year? How much would have been charged out to the three departments? Round your answers to the nearest dollar. Assembly $fill in the blank 14 Fabricating fill in the blank 15 Packaging fill in the blank 16 Total $fill in the blank 17

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 1CE: The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:...

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

Fixed costs (salaries, tools): $67,260 per year

Variable costs (supplies): $1.45 per maintenance hour

The Assembly and Packaging departments expect to use maintenance hours relatively evenly throughout the year. The Fabricating Department typically uses more maintenance hours in the month of November. Estimated usage in hours for the year and for the peak month is as follows:

	Yearly hours	Monthly Peak Hours
Assembly Department	5,000		345
Fabricating Department	6,700		1,150
Packaging Department	11,100		805
Total maintenance hours	22,800		2,300

Actual usage for the year by:

Assembly Department	3,750
Fabricating Department	6,800
Packaging Department	10,300
Total maintenance hours	20,850

Required:

1. Calculate a variable rate for the Maintenance Department. Round your answer to the nearest cent.
$fill in the blank 1 per maintenance hour

Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours. Round your answers to the nearest dollar.

Department	Peak Number of Hours	Allocated Fixed Cost
Assembly	fill in the blank 2	$fill in the blank 3
Fabricating	fill in the blank 4	fill in the blank 5
Packaging	fill in the blank 6	fill in the blank 7
Total	fill in the blank 8	$fill in the blank 9

2. Use the two rates 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. Round your answers to the nearest dollar.

Assembly	$fill in the blank 10
Fabricating	fill in the blank 11
Packaging	fill in the blank 12
Total	$fill in the blank 13

3. What if the Assembly Department used 3,800 maintenance hours in the year? How much would have been charged out to the three departments? Round your answers to the nearest dollar.

Assembly	$fill in the blank 14
Fabricating	fill in the blank 15
Packaging	fill in the blank 16
Total	$fill in the blank 17

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