Ginger Company operates a cafeteria for the benefit of its employees. The company subsidizes the cafeteria heavily by allowing employees to purchase meals at greatly reduced prices. Budgeted and actual costs in the cafeteria for the year just ended are as follows: Variable costs* Fixed costs *Unrecovered cost after deducting amounts received from employees. Costs of the cafeteria are charged to producing departments on the basis of the number of employees in these departments. Fixed costs are charged on the basis of the percentage of peak-period requirements. Data concerning the company's producing departments follows: Budgeted number of employees Actual number of employees Percentage of peak-period requirements Required: a. Calculate the budgeted rate of variable costs per employee. b. Compute the dollar amount of variable and fixed costs that should be charged to each of the producing departments at the end of the year for purposes of evaluating performance. c. Identify the amount, if any, of actual costs that should not be charged to the operating departments. Budgeted Actual $821,205 $657,020 $417,000 $436,000 Machining Assembly Total 740 1,155 415 270 40% 640 910 60% 100%
Ginger Company operates a cafeteria for the benefit of its employees. The company subsidizes the cafeteria heavily by allowing employees to purchase meals at greatly reduced prices. Budgeted and actual costs in the cafeteria for the year just ended are as follows: Variable costs* Fixed costs *Unrecovered cost after deducting amounts received from employees. Costs of the cafeteria are charged to producing departments on the basis of the number of employees in these departments. Fixed costs are charged on the basis of the percentage of peak-period requirements. Data concerning the company's producing departments follows: Budgeted number of employees Actual number of employees Percentage of peak-period requirements Required: a. Calculate the budgeted rate of variable costs per employee. b. Compute the dollar amount of variable and fixed costs that should be charged to each of the producing departments at the end of the year for purposes of evaluating performance. c. Identify the amount, if any, of actual costs that should not be charged to the operating departments. Budgeted Actual $821,205 $657,020 $417,000 $436,000 Machining Assembly Total 740 1,155 415 270 40% 640 910 60% 100%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ginger Company operates a cafeteria for the benefit of its employees.
The company subsidizes the cafeteria heavily by allowing employees
to purchase meals at greatly reduced prices. Budgeted and actual
costs in the cafeteria for the year just ended are as follows:
Variable costs*
Fixed costs
*Unrecovered cost after deducting amounts received from employees.
Costs of the cafeteria are charged to producing departments on the
basis of the number of employees in these departments. Fixed costs
are charged on the basis of the percentage of peak-period
requirements. Data concerning the company's producing
departments follows:
Budgeted number of employees
Actual number of employees
Percentage of peak-period requirements
Required:
a. Calculate the budgeted rate of variable costs per employee.
b. Compute the dollar amount of variable and fixed costs that should
be charged to each of the producing departments at the end of the
year for purposes of evaluating performance.
c. Identify the amount, if any, of actual costs that should not be
charged to the operating departments.
Budgeted Actual
$821,205 $657,020
$417,000 $436,000
Machining Assembly Total
740 1,155
415
270
40%
640 910
60% 100%
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