Layton Company operates a free day-care center for the benefit of its employees. The company subsidizes the day-care center heavily and charges only a very nominal fee to employees using the center services. Budgeted and actual costs in the day-care center for the most recent year are as follows: The variable costs of the day-care center are charged to operating departments on the basis of employees in their departments. Data concerning these operating departments follow: The level of budgeted fixed costs in the day-care center 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 the year for purposes of evaluating performance.
b. Identify the amount, if any, of actual costs that should not be charged to the operating departments for performance evaluation purposes.

Question

Layton Company operates a free day-care center for the benefit of its employees. The company subsidizes the day-care center heavily and charges only a very nominal fee to employees using the center services. Budgeted and actual costs in the day-care center for the most recent year are as follows:  The variable costs of the day-care center are charged to operating departments on the basis of employees in their departments. Data concerning these operating departments follow:  The level of budgeted fixed costs in the day-care center 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 the year for purposes of evaluating performance.
b. Identify the amount, if any, of actual costs that should not be charged to the operating departments for performance evaluation purposes.

Quizplus · Accepted Answer

The Answer of Layton Company operates a free day-care center for the benefit of its employees. The company subsidizes the day-care center heavily and charges only a very nominal fee to employees using the center services. Budgeted and actual costs in the day-care center for the most recent year are as follows:  The variable costs of the day-care center are charged to operating departments on the basis of employees in their departments. Data concerning these operating departments follow:  The level of budgeted fixed costs in the day-care center 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 the year for purposes of evaluating performance.
b. Identify the amount, if any, of actual costs that should not be charged to the operating departments for performance evaluation purposes.

Layton Company Operates a Free Day-Care Center for the Benefit