Hansaben Sharp Motor Company has a cafeteria that serves two operating divisions-an Auto Division and a Truck Division. The costs ofoperating the cafeteria are budgeted at $81,000 per month plus $0.60 per meal served.The fixed costs of the cafeteria are determined by peak-period requirements. The Auto Division is responsible for 69% of the peak-period requirements, and the Truck Division is responsible for the other 31%.For June, the Auto Division estimated it would need 98,000 meals, and the Truck Division estimated it would need 68,000 meals.However, due to unexpected layoffs of employees during the month, only 68,000 meals were served to the Auto Division. Another68,000 meals were served to the Truck Division as planned.The cafeteria's actual fixed costs for June totaled $84,000 and its actual meal costs totaled $99,600.Required:1. How much cafeteria cost should be charged to each division for June?2. Assume the company follows the practice of allocating all cafeteria costs to the divisions based on the number of meals served. Onthis basis, how much cost would be allocated to each division for June?Note: Round your intermediate calculations to 2 decimal places.1. Total cost charged2. Total cost allocatedAutoDivisionTruckDivision

Working Notes:1. Total Cost charged :a. Auto Division b. Truck Division

Required: 1. How much cafeteria cost should be charged to each division for June? 2. 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 2 decimal places. 1. Total cost charged 2. Total cost allocated Auto Division Truck Division

Required: 1. How much cafeteria cost should be charged to each division for June? 2. 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 2 decimal places. 1. Total cost charged 2. Total cost allocated Auto Division Truck Division

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...

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Sharp Motor Company has two operating divisions—an Auto Division and a Truck Division. The company has a cafeteria that serves the employees of both divisions. The costs of operating the cafeteria are budgeted at $73,000 per month plus $0.50 per meal served. The company pays all the cost of the meals. The fixed costs of the cafeteria are determined by peak-period requirements. The Auto Division is responsible for 59% of the peak-period requirements, and the Truck Division is responsible for the other 41%. For June, the Auto Division estimated it would need 84,000 meals served, and the Truck Division estimated it would need 54,000 meals served. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Auto Division. Another 54,000 meals were served to the Truck Division as planned. The cafeteria's actual fixed costs for June totaled $83,000 and its actual meal costs totaled $71,000. Required: 1. How much cafeteria cost should be charged…