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Leslie Company operates a cafetena 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 the cafeteria for the year just ended are as follows: Actual $ 898,750 $ 340,000 $ 419,000 "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 $1,114,280 Variable costs Fixed costs Budgeted number of employees Actual number of employees Percentage of peak-period requirements Machining 572 392 40% Assembly 993 858 60% Total 1,565 1,250 100% Required: a. 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. b. Identify the amount, if any, of actual costs that should not be charged to the operating departments.

Leslie Company operates a cafetena 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 the cafeteria for the year just ended are as follows: Actual $ 898,750 $ 340,000 $ 419,000 "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 $1,114,280 Variable costs Fixed costs Budgeted number of employees Actual number of employees Percentage of peak-period requirements Machining 572 392 40% Assembly 993 858 60% Total 1,565 1,250 100% Required: a. 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. b. Identify the amount, if any, of actual costs that should not be charged to the operating departments.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Leslie 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 Budgeted $1,114,280 $ 340,000 Actual $ 898,750 $ 419,000 "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 Machining 572 392 40% Assembly 993 858 60% Total 1,565 1,250 100% Required: a. 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. b. identify the amount, if any, of actual costs that should not be charged to the operating departments.
Transcribed Image Text:Leslie 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 Budgeted $1,114,280 $ 340,000 Actual $ 898,750 $ 419,000 "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 Machining 572 392 40% Assembly 993 858 60% Total 1,565 1,250 100% Required: a. 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. b. identify the amount, if any, of actual costs that should not be charged to the operating departments.
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