Problem - Fixed cost (salaries, tools): 57,200 per year
Variable cost (supplies): 0.75 per maintenance hour
Yearly hrs Monthly peak hrs
Assembly Department: 4500 390
Fabricating Department: 6700 1300
Packaging Department: 10,800 910
Total Maintenance: 22,000 2,600
Actual usage for the year by:
Assembly Department: 3960
Fabricating Department: 6800
Packaging Department: 10,000
Total Maintenance: 20,760
Required:
1. Calculate a variable rate for the Maintenance Department. Round your answer to two decimal places.
Calculate the allocated fixed cost for each using department based on its budgeted peak month usage in maintenance hours.
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.