Exercise $11-15($Algo$)$ Service Department Charges $[$LO$11-4]$

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 $$55$ per employee. Fixed Medical Services Department costs are budgeted at $$676,300$ per year. Actual Medical Services Department costs for the most recent year were $$106,800$ for variable costs and $$682,000$ for fixed costs. Data concerning employees in the three operating departments follow:

Cutting Milling Assembly

Budgeted number of employees $615286910$

Actual number of employees for the most recent year $515386810$

Long$-$run average number of employees $1,1107401,850$

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?Exercise $11-15($Algo$)$ Service Department Charges $[$LO$11-4]$

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 $$55$ per employee. Fixed Medical Services Department costs are

budgeted at $$676,300$ per year. Actual Medical Services Department costs for the most recent year were $$106,800$ for variable costs

and $$682,000$ 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

Required:

Determine the Medical Services Department charges for the year to each of the operating departments$-$Cutting, Milling, and

Assembly.

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.

Required $2$

Determine the Medical Services Department charges for the year to each of the operating departments$-$Cutting, Milling, and

Assembly.