Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sharp Motor Company has two operating divisions_an Auto Division and a Truck Division. The company has a cafeterla that serves the employees of both divisions.
Sharp Motor Company has two operating divisions_an Auto Division and a Truck Division. The company has a cafeterla that serves the employees of both divisions. The costs of operating the cafeterla are budgeted at $83,000 per month plus $0.90 per meal served. The company pays all the cost of the meals. The fixed costs of the cafeterla are determined by peak-perlod requirements. The Auto Division Is responsible for 73% of the peakperlod requirements, and the Truck Division is responsible for the other 27%. For June, the Auto Division estimated it would need 99,000 meals served, and the Truck Division estimated it would need 69,000 meals served. However, due to unexpected layoffs of employees durling the month, only 69,000 meals were served to the Auto Division. Another 69,000 meals were served to the Truck Division as planned. The cafeterla's actual fixed costs for June totaled \$91,000 and its actual meal costs totaled \$144,200. Required: 1. How much cafeterla cost should be charged to each division for June? 2 Assume the company follows the practice of allocating al/ cafeterla 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 divislon for June? (Round your intermedlate calculations to 2 decimal places.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started