Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Anibo Aviation Services has two operating divisions - Airframe Division and Powerplant Division. The company has a snack bar that serves the employees of

 

Anibo Aviation Services has two operating divisions - Airframe Division and Powerplant Division. The company has a snack bar that serves the employees of both divisions. The costs of operating the snack bar are budgeted at $87,000 per month plus $0.90 per meal served. The company pays all the cost of the meals. The fixed costs of the snack bar are determined by peak-period requirements. The airframe Division is responsible for 58% of the peak-period requirements, and the Powerplant Division is responsible for the other 42%. For June, the Airframe Division estimated it would need 84,000 meals served, and the Powerplant Division estimated it would need 54,000 meals served. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Airframe Division. Another 54,000 meals were served to the Powerplant Division as planned. The snack bar's actual fixed costs for June totaled $94,000 and its actual meal costs totaled $116,200. Required: 1. Assume the company follows the practice of allocating all snack bar 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? SHOW YOUR WORK

Step by Step Solution

3.44 Rating (147 Votes )

There are 3 Steps involved in it

Step: 1

File Paste B IU A Clipboard Picture 74 I X A B 2030 2031 Service Department Charges ... 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

Intermediate Accounting

Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,

10th Canadian Edition, Volume 1

978-1118735329, 9781118726327, 1118735323, 1118726324, 978-0176509736

More Books

Students also viewed these Accounting questions