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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$)$: $$66,185$ per year

Variable costs $($supplies$)$: $$1\mathrm{.}35$ per maintenance hour

Estimated usage by:

Assembly Department

Fabricating Department

$\backslash$table$[[4,800],[6,300],[10,600],[21,700]]$

Actual usage by:

Assembly Department

Fabricating Department

$\backslash$table$[[3,300],[6,400],[9,800],[19,500]]$

Required:

Calculate a single charging rate for the Maintenance Department. Round your answer to the nearest cent.

per maintenance hourfor maintenance for the year.

$

$3.$ 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

Fabricating Department charge

Packaging Department charge

Total amount charged

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Single charging rate combines variable and fixed costs of the support department. Budgeted fixed and variable costs are in the numerator and budgeted usage is in the denominator.

Actual usage by using departments is multiplied by the charging rate to get the amount charged.

Calculate as in Requirement $2$ and change the Assembly Department's usage to $4,000.$

See Example $7\mathrm{.}1.$

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