Leslie Company operates a cafeteria for the benefit of its employees. The company subsidizes the cafeteria heavily by allo employees to purchase meals at greatly reduced prices. Budgeted and actual costs in the cafeteria for the year just ended follows: Variable costs Fixed costs Budgeted $933,165 $366,000 Actual $777,240 $391,000 *Unrecovered cost after deducting amounts received from employees. Costs of the cafeteria are charged to producing departments on the basis of the number of employees in these departmen costs are charged on the basis of the percentage of peak-period requirements. Data concerning the company's producing departments follows: Budgeted number of employees Actual number of employees Percentage of peak-period requirements Machining 465 270 40% Assembly 878 750 60% Total 1,335 1,020 100%

Leslie Company operates a cafeteria for the benefit of its employees. The company subsidizes the cafeteria heavily by allo employees to purchase meals at greatly reduced prices. Budgeted and actual costs in the cafeteria for the year just ended follows: Variable costs Fixed costs Budgeted $933,165 $366,000 Actual $777,240 $391,000 *Unrecovered cost after deducting amounts received from employees. Costs of the cafeteria are charged to producing departments on the basis of the number of employees in these departmen costs are charged on the basis of the percentage of peak-period requirements. Data concerning the company's producing departments follows: Budgeted number of employees Actual number of employees Percentage of peak-period requirements Machining 465 270 40% Assembly 878 750 60% Total 1,335 1,020 100%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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