Exam 26: Service Department Charges

For performance evaluation purposes,budgeted service department costs,instead of actual service department costs,should be charged to the operating departments.

For performance evaluation purposes,variable costs of service departments should be charged to operating departments at the end of the period on the basis of:

Gunnison Foods has two operating departments, Processing and Packaging. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are allocated to the operating departments on the basis of the number of employees. Data for last year follow: The budgeted costs of the Housekeeping Department were $40,800 and the actual costs were $44,980. -How much of the actual Housekeeping Department costs should not have been charged to the operating departments for performance evaluation purposes?

Zindell Corporation has two operating divisions-a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $33 per shipment.The Logistics Department's fixed costs are budgeted at $369,200 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $307,050 and fixed costs totaled $374,720.The North Division had a total of 3,900 shipments and the South Division had a total of 5,000 shipments for the year. Required: a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year. b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Peake Corporation's Maintenance Department provides services to the company's two operating divisions-the Paints Division and the Stains Division.The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments.The fixed costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments during the peak period.Data appear below: For performance evaluation purposes,how much Maintenance Department cost should be charged to the Stains Division at the end of the year?

The variable costs of service departments should typically be charged to operating departments on the basis of the number of units produced in the operating departments.

Boudrie Corporation's Maintenance Department provides services to the company's two operating divisions-the Paints Division and the Stains Division. The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments. The fixed costs of the Maintenance Department are determined by the number of cases produced by the operating departments during the peak period. Data appear below: -How much actual Maintenance Department cost should not be allocated to the operating divisions at the end of the year?

The Juab Company has a Freight Department that delivers scrap metal from salvage yards to its two fabricating facilities--the Emory Plant and the Salina Plant. Operating data for the two plants for last year follow: Budgeted costs consist of $150,000 fixed costs and $0.50 variable cost for each ton of scrap delivered to the plants. Actual costs incurred in the Freight Department were $52,800 variable, and $165,000 fixed. Juab allocates variable and fixed service department costs separately. The level of budgeted fixed costs is determined by peak-period needs. The Emory Plant requires 40% of the peak-period capacity and the Salina Plant requires 60%. -How much of the actual Freight Department cost should not be charged to either plant at the end of the year for performance evaluation purposes?

Fixed service department costs should be charged to operating departments at the end of the period according to which one of the following the formulas?

Marazzi Corporation has two operating divisions-an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $47 per shipment. The Logistics Department's fixed costs are budgeted at $328,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $333,270 and fixed costs totaled $340,240. The East Division had a total of 2,300 shipments and the West Division had a total of 4,600 shipments for the year. -How much actual Logistics Department cost should not be allocated to the operating divisions at the end of the year?

Fixed costs budgeted for Caldwell Company's Maintenance Department for the year totaled $480,000; actual fixed costs for the year totaled $510,000. The level of budgeted fixed costs is determined by peak-period requirements. The Milling Department requires 1/3 of the peak-period capacity and the Assembly Department requires 2/3. -How much fixed maintenance cost should be charged to the Assembly Department at the end of the year for purposes of measuring performance?

The Juab Company has a Freight Department that delivers scrap metal from salvage yards to its two fabricating facilities--the Emory Plant and the Salina Plant. Operating data for the two plants for last year follow: Budgeted costs consist of $150,000 fixed costs and $0.50 variable cost for each ton of scrap delivered to the plants. Actual costs incurred in the Freight Department were $52,800 variable, and $165,000 fixed. Juab allocates variable and fixed service department costs separately. The level of budgeted fixed costs is determined by peak-period needs. The Emory Plant requires 40% of the peak-period capacity and the Salina Plant requires 60%. -How much variable Freight Department costs should be charged to the Salina Plant at the end of the year for performance evaluation purposes?

Hilbun Corporation has two operating divisions-an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $34 per shipment.The Logistics Department's fixed costs are budgeted at $371,700 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. How much Logistics Department cost should be charged to the Atlantic Division at the end of the year for performance evaluation purposes?

Redder Company has a purchasing department that provides services to two factories located in Fargo and the other in Custer.Budgeted costs for the purchasing department consist of $55,000 per year of fixed costs and $8 per purchase order for variable costs.The level of budgeted fixed costs is determined by the peak-period requirements.The Fargo factory requires 40% of the peak-period capacity and the Custer factory requires 60%. During the coming year,1,800 purchase orders were processed for the Fargo factory and 2,700 purchase orders for the Custer factory. Required: Compute the amount of purchasing department cost that should be charged to each factory for the year.

Dunkle Corporation's Maintenance Department provides services to the company's two operating divisions-the Paints Division and the Stains Division.The variable costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments.The fixed costs of the Maintenance Department are budgeted based on the number of cases produced by the operating departments during the peak period.Data appear below: For performance evaluation purposes,how much Maintenance Department cost should be charged to the Paints Division at the end of the year?

Norgaard Corporation has two operating divisions: a Consumer Division and a Commercial Division.The company's Customer Service Department provides services to both divisions.The variable costs of the Customer Service Department are budgeted at $70 per order.The Customer Service Department's fixed costs are budgeted at $245,000 for the year.The fixed costs of the Customer Service Department are determined based on the peak period orders. At the end of the year,actual Customer Service Department variable costs totaled $348,920 and fixed costs totaled $259,790.The Consumer Division had a total of 1,520 orders and the Commercial Division had a total of 3,360 orders for the year.For performance evaluation purposes,how much actual Customer Service Department cost should NOT be charged to the operating divisions at the end of the year?

Omeara Corporation has two operating divisions-an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $48 per shipment.The Logistics Department's fixed costs are budgeted at $431,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year,actual Logistics Department variable costs totaled $505,920 and fixed costs totaled $438,080.The Atlantic Division had a total of 3,900 shipments and the Pacific Division had a total of 6,300 shipments for the year.How much Logistics Department cost should be charged to the Pacific Division at the end of the year for performance evaluation purposes?

Marazzi Corporation has two operating divisions-an East Division and a West Division. The company's Logistics Department services both divisions. The variable costs of the Logistics Department are budgeted at $47 per shipment. The Logistics Department's fixed costs are budgeted at $328,600 for the year. The fixed costs of the Logistics Department are determined based on peak-period demand. At the end of the year, actual Logistics Department variable costs totaled $333,270 and fixed costs totaled $340,240. The East Division had a total of 2,300 shipments and the West Division had a total of 4,600 shipments for the year. -How much Logistics Department cost should be allocated to the West Division at the end of the year?

Scuderi Corporation has two operating divisions-an Inland Division and a Coast Division.The company's Customer Service Department provides services to both divisions.The variable costs of the Customer Service Department are budgeted at $29 per order.The Customer Service Department's fixed costs are budgeted at $381,600 for the year.The fixed costs of the Customer Service Department are determined based on the peak period orders. At the end of the year,actual Customer Service Department variable costs totaled $219,905 and fixed costs totaled $383,860.The Inland Division had a total of 1,520 orders and the Coast Division had a total of 5,690 orders for the year. Required: a.Prepare a report showing how much of the Customer Service Department's costs should be charged to each of the operating divisions at the end of the year. b.How much of the actual Customer Service Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Higuera Corporation has two operating divisions-a Consumer Division and a Commercial Division. The company's Order Fulfillment Department provides services to both divisions. The variable costs of the Order Fulfillment Department are budgeted at $28 per order. The Order Fulfillment Department's fixed costs are budgeted at $280,800 for the year. The fixed costs of the Order Fulfillment Department are budgeted based on the peak period orders. At the end of the year, actual Order Fulfillment Department variable costs totaled $152,810 and fixed costs totaled $286,580. The Consumer Division had a total of 1,720 orders and the Commercial Division had a total of 3,460 orders for the year. -How much actual Order Fulfillment Department cost should not be allocated to the operating divisions at the end of the year?