Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 $ 286,000* $ 214,000 *Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Actual $ 365,800 $ 230,400 Machine-Hours Period Capacity Required Budget Actual Forming Department Assembly Department Total 71% 9,700 11,700 29% 100% 4,600 3,600 14,300 15,300 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?

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 $ 286,000* $ 214,000 *Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow: Percentage of Peak- Actual $ 365,800 $ 230,400 Machine-Hours Period Capacity Required Budget Actual Forming Department Assembly Department Total 71% 9,700 11,700 29% 100% 4,600 3,600 14,300 15,300 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?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Haresh

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 $ 286,000* $ 214,000 Actual $ 365,800 $ 230,400 "Budgeted at $20 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 Total 71% 9,700 11,700 29% 100% 4,600 3,600 14,300 15,300 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?
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 $ 286,000* $ 214,000 Actual $ 365,800 $ 230,400 "Budgeted at $20 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 Total 71% 9,700 11,700 29% 100% 4,600 3,600 14,300 15,300 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?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost allocation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS