Oaks Company maintains a cafeteria for its employees. For June, variable food costs were budgeted at $48 per employee based on a budgeted level of 1,000 employees in other departments. During the month, an average of 1,100 employees worked in other departments. The cafeteria's total food costs for the month came to $57,750. How much food cost should be charged to the other departments at the end of the month for performance evaluation purposes?
A) $57,750
B) $52,500
C) $48,000
D) $52,800

Question

Quizplus · Accepted Answer

Variable food cost per employee = $48
Actual number of employees in other departments = 1,100
Total variable food cost = 48*1,100 = $52,800
Therefore, the amount charged to other departments for performance evaluation purposes should be $52,800.

Oaks Company Maintains a Cafeteria for Its Employees