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Problem 1 1 - 2 2 ( Algo ) Service Department Charges [ LO 1 1 - 4 ] Sharp Motor Company has a cafeteria
Problem Algo Service Department Charges LO
Sharp Motor Company has a cafeteria that serves two operating divisionsan Auto Division and a Truck Division. The costs of
operating the cafeteria are budgeted at $ per month plus $ per meal served.
The fixed costs of the cafeteria are determined by peakperiod requirements. The Auto Division is responsible for of the peak
period requirements, and the Truck Division is responsible for the other
For June, the Auto Division estimated it would need meals, and the Truck Division estimated it would need meals.
However, due to unexpected layoffs of employees during the month, only meals were served to the Auto Division. Another
meals were served to the Truck Division as planned.
The cafeteria's actual fixed costs for June totaled $ and its actual meal costs totaled $
Required:
How much cafeteria cost should be charged to each division for June?
Assume the company follows the practice of allocating all cafeteria costs to the divisions based on the number of meals served. On
this basis, how much cost would be allocated to each division for June?
Note: Round your intermediate calculations to decimal places.
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