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): $68,670 per year

Variable costs (supplies): $1.45 per maintenance hour

Estimated usage by:

  Assembly Department 4,800

  Fabricating Department 6,500

  Packaging Department 10,500

  Total maintenance hours 21,800

Actual usage by:

  Assembly Department 3,500

  Fabricating Department 6,600

  Packaging Department 9,700

  Total maintenance hours 19,800

Required:

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

$  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. $

3. What if the Assembly Department used 3,550 maintenance hours in the year? How much would have been charged out to the three departments?

Assembly Department charge $

Fabricating Department charge    

Packaging Department charge    

Total amount charged $