317 er atlocation CEX.07.01.ALGO (A Calculati and Fixed costs (salaries, tools):

Question

317 er atlocation CEX.07.01.ALGO (A Calculati and Fixed costs (salaries, tools):67,800 per ear Variable costs (supplies): $1.30 per maintenance hour Estimated usage by tools mbi Fabricat y Depar tment 7,000 Packaging Department 10,60 Total maintenance hours 22,600 Actual usage by Assembl Fabricating Department 7,100 Packaging Department 9,800 ent 3,425 Total maintenance hours 20,325 Required: the nearest cen 1. Calculate a single char ging rate for the Maintenance Department. Round vour answer to per maintenance hour nce Department to the user departments based on ectual 2. Use this rate t o assign the costs of the Maintenance Department to the u r the year Calculate the total amount charged for maintenance fo 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much woult have been charged out to the three departments? When required, round your answers to the nearest dolar. $ Fabricating Department charge Packaging Department charge Total amount charged Assembly Department charge

Explanation / Answer

Ans. 1 Single charging rate for maintenance department: 4.30 per maintenance hours Fixed cost 67800 Variable costs (22600*1.30) 29380 Total expected costs 97180 Single charging rate = Total expected cost / Total maintenance hours (estimated) 97180 / 22600 4.3 Ans. 2 Total amount charged for maintenance: 87397.5 Assembly (3425 * 4.30) 14727.5 Fabricating (7100 * 4.30) 30530 Packaging (9800 * 4.30) 42140 87397.5 Ans. 3 What if hours Assembly 4000 4000 * 4.30   17200 Fabricating 7100 7100 * 4.30   30530 Packaging 9800 9800 * 4.30   42140 TOTAL AMOUNT CHARGED 89870

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