Calculating and Using a Single Charging Rate

The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include:

Fixed costs (salaries, tools): $64,605 per year

Variable costs (supplies): $1.45 per maintenance hour

Estimated usage by:
Assembly Department	4,500
Fabricating Department	6,400
Packaging Department	11,000
Total maintenance hours	21,900
Actual usage by:
Assembly Department	3,325
Fabricating Department	6,500
Packaging Department	10,200
Total maintenance hours	20,025

Required:

1. Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent. $fill in the blank 1 per maintenance hour

2. Use this rate 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. $fill in the blank 2

3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments? When required, round your answers to the nearest dollar.

Assembly Department charge	$fill in the blank 3
Fabricating Department charge	fill in the blank 4
Packaging Department charge	fill in the blank 5
Total amount charged	$fill in the blank 6

2. Direct Method of Support Department Cost Allocation

Chekov Company has two support departments, Human Resources and General Factory, and two producing departments, Fabricating and Assembly.

	Support Departments	Producing Departments
	Human Resources	General Factory	Fabricating	Assembly
Direct costs	$160,000	$360,000	$114,200	$94,000
Normal activity:
Number of employees		60	45	80
Square footage	1,500		6,000	14,000

The costs of the Human Resources Department are allocated on the basis of number of employees, and the costs of General Factory are allocated on the basis of square footage. Chekov Company uses the direct method of support department cost allocation.

Required:

1. Calculate the allocation ratios for the four departments using the direct method. If an amount is zero, enter "0". Round your answer to the nearest cent.

	Proportion of Driver Used by
	Human Resources	General Factory	Fabricating	Assembly
Human Resources	fill in the blank 1	fill in the blank 2	fill in the blank 3	fill in the blank 4
General Factory	fill in the blank 5	fill in the blank 6	fill in the blank 7	fill in the blank 8

2. Using the direct method, allocate the costs of the Human Resources and General Factory departments to the Fabricating and Assembly departments. If an amount is zero, enter "0".

	Support Departments		Producing Departments
	Human Resources	General Factory		Fabricating	Assembly
Direct costs	$fill in the blank 9	$fill in the blank 10		$fill in the blank 11	$fill in the blank 12
Allocate:
Human Resources	fill in the blank 13	fill in the blank 14		fill in the blank 15	fill in the blank 16
General Factory	fill in the blank 17	fill in the blank 18		fill in the blank 19	fill in the blank 20
Total after allocation	$fill in the blank 21	$fill in the blank 22		$fill in the blank 23	$fill in the blank 24

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