10 Check my work Problem 11B-5 Service Department Charges [LO11-6] Tasman Produc

Question

10 Check my work Problem 11B-5 Service Department Charges [LO11-6] Tasman Products, Ltd., 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. Book Print ferences Data for the Maintenance Department follow: Budget Actual Variable costs for lubricants $296,000 $378,800 Fixed costs for salaries and other $204,000 $219,489 Budgeted at $20 per machine-hour. Data for the Forming and Assembly Departments follow Percentage of Peak-PeriodMachine-Hours Capacity Renuired t Actual Type here to search /2/2018

Explanation / Answer

1 Particular Forming Department Assembly Department Total Variable Cost $20 /Machien Hour X 12300 246000 $20 /Machien Hour X 3500 70000 316000 Fixed Cost 70%X$204000 142800 30%X$204000 61200 204000 Total Cost Charged 388800 131200 520000 2. Department and are the responsibility of the maintainance department's Manager. The Amount not Charged would be:- Particular Variable Cost Fixed Cost Total Actual Cost Incurred 378800 219400 598200 Cost Charged (above) 316000 204000 520000 Cost not Charged ( Spending Variance) 62800 15400 78200

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