Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the company's FormingDepartment 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 arepresented below.Data for the Maintenance Department follow:Variable costs for lubricantsFixed costs for salaries and other"Budgeted at $20 per machine-hour.Data for the Forming and Assembly Departments follow:Forming DepartmentAssembly DepartmentTotalBudget$ 312,000$ 206,000Percentageof Peak-PeriodCapacityRequired73%27%100%Actual$ 399,600$ 221,600Machine-HoursBudget10,4005,20015,600Actual12,4004,20016,600The level 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 actual Maintenance Department costs for the year should be treated as a spending variance and notcharged to the Forming and Assembly departments?Complete this question by entering your answers in the tabs below.Required 1 Required 2How much Maintenance Department cost should be charged to the Forming Department and to the Assembly Department?

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Description: Tasman Products, Limited, of Australia has a Maintenance Department that services the equipment in the company's FormingDepartment and Assembly Department. The cost of this servicing is charged to the operating departments on the basis of machine-ho

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Tasman Products, Limited, of Australia 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. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other "Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow: Forming Department Assembly Department Total Budget $ 312,000 $ 206,000 Percentage of Peak- Period Capacity Required 73% 274 100% Actual $ 399,600 $ 221,600 Machine-Hours Budget 10,400 5,200 15,600 Actual 12,400 4,200 16,600 The level 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 actual Maintenance Department costs for the year should be treated as a spending variance and not charged to the Forming and Assembly departments?

Tasman Products, Limited, of Australia 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. Data for the Maintenance Department follow: Variable costs for lubricants Fixed costs for salaries and other "Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow: Forming Department Assembly Department Total Budget $ 312,000 $ 206,000 Percentage of Peak- Period Capacity Required 73% 274 100% Actual $ 399,600 $ 221,600 Machine-Hours Budget 10,400 5,200 15,600 Actual 12,400 4,200 16,600 The level 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 actual Maintenance Department costs for the year should be treated as a spending variance and not charged to the Forming and Assembly departments?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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