Harris Company's two service departments provide the following data: The two service departments serve three producing departments
Question:
The two service departments serve three producing departments which show the following budgeted and actual cost and service-hours data:
Required:
(1) Compute a predetermined billing rate for each service department.
(2) Compute the amounts charged to the producing departments for services rendered. Use the predetermined billing rates computed for requirement 1.
(3) Compute spending and idle capacity variances for each service department, assuming fixed cost represents 70% of budgeted cost for the Carpenter Shop and 80% for Electricians.
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