Service Department Charges: Anibo Aviation Services has two operating divisions - Airframe Division and Powerplant Division. The company has a snack bar that serves the employees of both divisions. The costs of operating the snack bar are budgeted at $87,000 per month plus $0.90 per meal served. The company pays all the cost of the meals. The fixed costs of the snack bar are determined by peak-period requirements. The airframe Division is responsible for 58% of the peak-period requirements, and the Powerplant Division is responsible for the other 42%. For June, the Airframe Division estimated it would need 84,000 meals served, and the Powerplant Division estimated it would need 54,000 meals served. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Airframe Division. Another 54,000 meals were served to the Powerplant Division as planned. The snack bar's actual fixed costs for June totaled $94,000 and its actual meal costs totaled $116,200. Required: 1. Assume the company follows the practice of allocating all snack bar costs incurred each month to the divisions in proportion to the number of meals served to each division during the month. On this basis, how much cost would be allocated to each division for June? SHOW YOUR WORK
Service Department Charges: Anibo Aviation Services has two operating divisions - Airframe Division and Powerplant Division. The company has a snack bar that serves the employees of both divisions. The costs of operating the snack bar are budgeted at $87,000 per month plus $0.90 per meal served. The company pays all the cost of the meals. The fixed costs of the snack bar are determined by peak-period requirements. The airframe Division is responsible for 58% of the peak-period requirements, and the Powerplant Division is responsible for the other 42%. For June, the Airframe Division estimated it would need 84,000 meals served, and the Powerplant Division estimated it would need 54,000 meals served. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Airframe Division. Another 54,000 meals were served to the Powerplant Division as planned. The snack bar's actual fixed costs for June totaled $94,000 and its actual meal costs totaled $116,200. Required: 1. Assume the company follows the practice of allocating all snack bar costs incurred each month to the divisions in proportion to the number of meals served to each division during the month. On this basis, how much cost would be allocated to each division for June? SHOW YOUR WORK
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:**ACCOUNT 249 Intro to Managerial Accounting**
**Chapter 11 Canvas Homework – SHOW YOUR WORK**
**Service Department Charges:** Anibo Aviation Services has two operating divisions — Airframe Division and Powerplant Division. The company has a snack bar that serves the employees of both divisions. The costs of operating the snack bar are budgeted at $87,000 per month plus $0.90 per meal served. The company pays all the cost of the meals.
The fixed costs of the snack bar are determined by peak-period requirements. The Airframe Division is responsible for 58% of the peak-period requirements, and the Powerplant Division is responsible for the other 42%.
For June, the Airframe Division estimated it would need 84,000 meals served, and the Powerplant Division estimated it would need 54,000 meals served. However, due to unexpected layoffs of employees during the month, only 54,000 meals were served to the Airframe Division. Another 54,000 meals were served to the Powerplant Division as planned.
The snack bar’s actual fixed costs for June totaled $94,000 and its actual meal costs totaled $116,200.
**Required:**
1. Assume the company follows the practice of allocating all snack bar costs incurred each month to the divisions in proportion to the number of meals served to each division during the month. On this basis, how much cost would be allocated to each division for June? SHOW YOUR WORK
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education