Kirston Company operates a free cafeteria for the benefit of its employees. Budgeted and actual costs in the cafeteria for last year are given below: The variable costs of the cafeteria are charged to operating departments on the basis of the number of employees in these departments. Data concerning last year are given below: The level of budgeted fixed costs in the cafeteria is determined by the peak-period requirements.
Required:
a. Compute the dollar amount of the variable and fixed costs that should have been charged to each of the operating departments at the end of last year for purposes of evaluating performance.
b. Identify the amount, if any, of actual cafeteria costs that should not be charged to the operating departments.

Question

Kirston Company operates a free cafeteria for the benefit of its employees. Budgeted and actual costs in the cafeteria for last year are given below:  The variable costs of the cafeteria are charged to operating departments on the basis of the number of employees in these departments. Data concerning last year are given below:  The level of budgeted fixed costs in the cafeteria is determined by the peak-period requirements.
Required:
a. Compute the dollar amount of the variable and fixed costs that should have been charged to each of the operating departments at the end of last year for purposes of evaluating performance.
b. Identify the amount, if any, of actual cafeteria costs that should not be charged to the operating departments.

Quizplus · Accepted Answer

The Answer of Kirston Company operates a free cafeteria for the benefit of its employees. Budgeted and actual costs in the cafeteria for last year are given below:  The variable costs of the cafeteria are charged to operating departments on the basis of the number of employees in these departments. Data concerning last year are given below:  The level of budgeted fixed costs in the cafeteria is determined by the peak-period requirements.
Required:
a. Compute the dollar amount of the variable and fixed costs that should have been charged to each of the operating departments at the end of last year for purposes of evaluating performance.
b. Identify the amount, if any, of actual cafeteria costs that should not be charged to the operating departments.

Kirston Company Operates a Free Cafeteria for the Benefit of Its