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The expected costs for the Maintenance Department of Stazler Inc

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

Fixed costs (salaries, tools): $64,900 per year

Variable costs (supplies): $1.35 per maintenance hour

Estimated usage by:

Assembly Department4,500
Fabricating Department6,700
Packaging Department10,800
Total maintenance hours22,000

Actual usage by:

Assembly Department3,960
Fabricating Department6,800
Packaging Department10,000
Total maintenance hours20,760

Required:

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

Rate = 1.35 + $64,900/ 22,000 = $4.30

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.

Total Amount Charged for Maintenance = 20,760 x $4.30 = $89,268

3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?

Assembly Department Charge17,200
Fabricating Department Charge29,240
Packaging Department Charge43,000
Total amount charged89,440

Explanation:

Assembly Department = 4,000 x $4.30 = $17,200
Fabricating Department = 6,800 x 4.30 = $29,240
Packing Department = 10,000 x $4.30 = $43,000

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