Tasman Products, Ltd., of Australia has a Maintenance Department that services t

Question

Tasman Products, Ltd., of Australia has a Maintenance Department that services the equipment in the company's Formin operating departments on the basis of machine-hours. Cost and other data relating to the Maintenance g Department and Assembly Department The cost of this servicing is charged to the Department and to the other two departments for the most recent year are presented below Data for the Maintenance Department follow Budget $ 331,200 S 424,560 $ 181,000 $194,100 Actual Variable costs for lubricants Fixed costs for salaries and other Budgeted at $23 per machine-hour. Data for the Forming and Assembly departments follow: Percentage of Peak-Period Capacity Required 68% 32% Machine-Hours Forming Department Assembly Department BudgetActual 11,500 3,900 9,500 4,900 Total 100% 14,400 15,400 The level of fixed costs in the Maintenance Department is determined by peak period requirements Required: Management would like data to assist in comparing actual performance to planned performance in the Maintenance Department and in the other departments

Explanation / Answer

2)

424,500 - ( 11,500 +3,900)23 =70,300

Fixed = 194,100 -181,000 = 13,100

Forming assembly total Variable cost@23 218,500 112,700 331,200 Fixed costs (181,000)68;32% 123,080 57,920 181,000 Total costs charged 341,580 170,620 512,200

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