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Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's 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 $56 per employee. Fixed Medical Services Department costs are budgeted at $697,500 per year. Actual Medical Services Department costs for the most recent year were $105,400 for variable costs and $703,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Required 1. Required 2 Cutting 617 517 1,020 Medical services department charges Cutting Milling 283 Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below. 383 680 Assembly 905 Milling Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 805 1,700 Assembly

Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's 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 $56 per employee. Fixed Medical Services Department costs are budgeted at $697,500 per year. Actual Medical Services Department costs for the most recent year were $105,400 for variable costs and $703,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Required 1. Required 2 Cutting 617 517 1,020 Medical services department charges Cutting Milling 283 Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below. 383 680 Assembly 905 Milling Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 805 1,700 Assembly

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Spending variance < Required 1 Required 2 >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required 1 Required 2 How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Spending variance < Required 1 Required 2 >
Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's 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 $56 per employee. Fixed Medical Services Department costs are budgeted at $697,500 per year. Actual Medical Services Department costs for the most recent year were $105,400 for variable costs and $703,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Required 1 Required 2 Cutting 617 517 1,020 Medical services department charges Cutting Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below. Milling 283 383 680 < Required 1 Assembly 905 Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. Milling 805 1,700 Assembly Required 2 >
Transcribed Image Text:Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's 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 $56 per employee. Fixed Medical Services Department costs are budgeted at $697,500 per year. Actual Medical Services Department costs for the most recent year were $105,400 for variable costs and $703,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Required 1 Required 2 Cutting 617 517 1,020 Medical services department charges Cutting Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below. Milling 283 383 680 < Required 1 Assembly 905 Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly. Milling 805 1,700 Assembly Required 2 >
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