Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's operating departments for the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating department. Variable Medical Services Department costs are budgeted at $60 per employee. Fixed Medical Services Department costs are budgeted at $633,300 per year. Actual Medical Services Department costs for the most recent year were $106.700 for variable costs and $639,000 for fixed costs. Data concerning employees in the three operating departments follow Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Cutting 602 502 930 Milling 283 383 620 Assembly 905 805 1,550 Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below.
Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's operating departments for the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating department. Variable Medical Services Department costs are budgeted at $60 per employee. Fixed Medical Services Department costs are budgeted at $633,300 per year. Actual Medical Services Department costs for the most recent year were $106.700 for variable costs and $639,000 for fixed costs. Data concerning employees in the three operating departments follow Budgeted number of employees Actual number of employees for the most recent year Long-run average number of employees Cutting 602 502 930 Milling 283 383 620 Assembly 905 805 1,550 Required: 1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and Assembly 2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not charged to the operating departments? Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's operating departments for
the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for
the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating
department.
Variable Medical Services Department costs are budgeted at $60 per employee. Fixed Medical Services Department costs are
budgeted at $633,300 per year. Actual Medical Services Department costs for the most recent year were $106.700 for variable costs
and $639,000 for fixed costs. Data concerning employees in the three operating departments follow.
Budgeted number of employees
Actual number of employees for the most
recent year
Long-run average number of employees
Cutting
602
502
930
Milling
283
383
620
Assembly
905
805
1,550
Required:
1. Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Milling, and
Assembly.
2. How much, if any, of the actual Medical Services Department costs for the year should be treated as a spending variance and not
charged to the operating departments?
Complete this question by entering your answers in the tabs below.
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Determine the Medical Services Department charges for the year to each of the operating departments-Cutting, Mill Battery Status: Charging
Assembly.
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