Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Korvanis Corporation operates a Medical Services Department for its employees. Charges to the companys operating departments for the variable costs of the Medical Services Department

Korvanis Corporation operates a Medical Services Department for its employees. Charges to the companys operating departments for the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating department.

Variable Medical Services Department costs are budgeted at $60 per employee. Fixed Medical Services Department costs are budgeted at $630,600 per year. Actual Medical Services Department costs for the most recent year were $105,800 for variable costs and $636,000 for fixed costs. Data concerning employees in the three operating departments follow:

Cutting Milling AssemblyBudgeted number of employees600297919Actual number of employees for the most recent year500397819Long-run average number of employees1,0206801,700

Required:

1. Determine the Medical Services Department charges for the year to each of the operating departmentsCutting, Milling, and Assembly.

2. How much, if any, of the actual Medical Services Department costs for the year should not be charged to the operating departments?

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

Financial Accounting

Authors: Anne Britton, Christopher Waterston

3rd Edition

027365859X, 978-0273658597

More Books

Students also viewed these Accounting questions