Lakeside Nursing Home has two operating departments, Custodial Care and Rehabilitation. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are charged to the operating departments on the basis of labor-hours. Data for September follow: The budgeted costs of the Housekeeping Department for September were $24,000 and the actual costs were $29,760.
-How much of the actual Housekeeping Department costs for September should not be charged to the operating departments for performance evaluation purposes?
A) $960
B) $5,760
C) $0
D) $1,240

Question

Lakeside Nursing Home has two operating departments, Custodial Care and Rehabilitation. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are charged to the operating departments on the basis of labor-hours. Data for September follow:  The budgeted costs of the Housekeeping Department for September were $24,000 and the actual costs were $29,760.
-How much of the actual Housekeeping Department costs for September should not be charged to the operating departments for performance evaluation purposes?
A) $960 
B) $5,760 
C) $0 
D) $1,240

Quizplus · Accepted Answer

The $960 represents costs that are not directly attributable to the operating departments and should not be charged to them for performance evaluation purposes.

Lakeside Nursing Home Has Two Operating Departments, Custodial Care and Rehabilitation