Stein Company uses predetermined departmental overhead rates to apply factory overhead. In computing these rates, accounting makes every attempt to transfer service department costs to producing departments on the most equitable bases. Budgeted cost and other data for the company's two service departments, Maintenance and General Factory, are as follows:

Required:
(1) Compute predetermined billing rates to be used to transfer estimated maintenance and general factory costs to benefiting departments. Use a single billing rate for each department.
(2) Compute spending and idle capacity variances for each service department.

Transcribed Image Text:

Maintenance General Factory $30,000 $20 per producing department employee Monthly fixed cost.... Variable cost.$8.50 per maintenance hour Expected level of activity 15,000 maintenance 1,000 producing department employees hours per month Actual November results: $51,000 980 producing department employees $132,000 Total cost. Actual level of activity.14,000 maintenance hours