Kamron's Supply, Inc.: Material Management Department Practical capacity Fixed costs of the materials services department 4,000 labor hours to 5,000 labor hours range Budgeted usage (qty) of materials management labor hours required to support the departments: Machining Department Assembly Department Total Budgeted variable cost per materials handling labor hours in the 4,000 labor-hour to 5,000 labor-hour range Actual usage (qty) of materials management labor hours required to support Machining Department Assembly Department Total
4,500 hours 500,000 1,800 hours 2,200 hours 4,000 hours 35 per hour used 1,400 hours 2,300 hours 3,700 hours
Single Rate Method Total actual hours of direct labor for Material Management Department4,000 Budgeted total cost pool$640,000 Allocation rate$160/Hr Total cost allocated to Machine Department$224,000 Total cost allocated to Assembly Department$368,000 Fixed costs of unused materials management department capacity$48,000 SHOWING WORK: Fixed Costs$500,000.00 Budgeted Hrs: Machine1,800 Assembly2,200 Total Budgeted Hrs4,000 Budgeted Variable Cost$35/Hr Total Budgeted Variable Cost$140,000.00 Total Cost$640,000.00 Overhead Rate$160.00 Actual Hrs: Machine1,400 Assembly2,300 Total Actual Hrs3,700 Machine Allocation$224,000.00 Assembly Allocation$368,000.00 Total Allocation$592,000.00 Unused
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