Departmental Cost Allocation in Profit Centers Elvis Wilbur owns two restaurants, the BeefBarn and the Fish Bowl. Each restaurant is treated as a profit center for performance evaluation.Although the restaurants have separate kitchens, they share a central baking facility. The principalcosts of the baking area include depreciation and maintenance on the equipment, materials, supplies,and labor.Required2. In May, total fixed and unit variable costs remained the same, but the Beef Barn served 2,000 tables andthe Fish Bowl served 3,000. How much should be allocated to each restaurant? a. Beef Barn: $8,000; Fish Bowl: $16,000b. Beef Barn: $8,800; Fish Bowl: $13,200c. Beef Barn: $9,600; Fish Bowl: $14,400d. Beef Barn: $10,000; Fish Bowl: $12,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Departmental Cost Allocation in Profit Centers Elvis Wilbur owns two restaurants, the Beef
Barn and the Fish Bowl. Each restaurant is treated as a profit center for performance evaluation.
Although the restaurants have separate kitchens, they share a central baking facility. The principal
costs of the baking area include
and labor.
Required
2. In May, total fixed and unit variable costs remained the same, but the Beef Barn served 2,000 tables and
the Fish Bowl served 3,000. How much should be allocated to each restaurant?
a. Beef Barn: $8,000; Fish Bowl: $16,000
b. Beef Barn: $8,800; Fish Bowl: $13,200
c. Beef Barn: $9,600; Fish Bowl: $14,400
d. Beef Barn: $10,000; Fish Bowl: $12,000
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