Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 Problem 11B-4 Service Department Charges [LO11-6] Sharp Motor Company has two operating divisions-an Auto Division and a Truck Division. The company has a cafeteria

image text in transcribed

2 Problem 11B-4 Service Department Charges [LO11-6] Sharp Motor Company has two operating divisions-an Auto Division and a Truck Division. The company has a cafeteria that serves the employees of both divisions. The costs of operating the cafeteria are budgeted at $88,000 per month plus $0.80 per meal served The company pays all the cost of the meals Ints The fixed costs of the cafeteria are determined by peak-period requirements. The Auto Division is responsible for 70% of the peak- period requirements, and the Truck Division is responsible for the other 30%. eBook For June, the Auto Division estimated it would need 97000 meals served, and the Truck Division estimated it would need 67,000 meals served. However, due to unexpected layoffs of employees during the month, only 67,000 meals were served to the Auto Division. Another 67,000 meals were served to the Truck Division as planned. Print C) Cost records in the cafeteria show that actual fixed costs for June totaled $94,000 and actual meal costs totaled $122,200 . eferences Required 1. How much cafeteria cost should be charged to each division for June? 2. Assume the company follows the practice of allocating all cafeteria costs incurred each month to the divisions in proportion to the number of meals served to each division during the month. On this basis, how much cost would be allocated to each division for June? Round your intermediate calculations to 2 decimal places.) Auto Division Division Truck 1. Total cost charged 2. Total cost allocated

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Alternative Minimum Tax For Individuals IRS Audit Technique Guide ATG

Authors: Internal Revenue Service

1st Edition

1304131556, 978-1304131553

More Books

Students also viewed these Accounting questions

Question

use percentiles and z scores to describe relative standing.

Answered: 1 week ago

Question

Approaches to Managing Organizations

Answered: 1 week ago

Question

Communicating Organizational Culture

Answered: 1 week ago