Korvanis Corporation operates a Medical Services Department that charges its variable costs to operating departments based...
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Korvanis Corporation operates a Medical Services Department that charges its variable costs to operating departments based on the actual number of employees in each department. It charges fixed costs to operating departments based on the long-run average number of employees. The Medical Services Department's variable costs are budgeted at $55 per employee and its fixed costs are budgeted at $609,700 per year. Actual Medical Services Department costs for the most recent year were $105,600 for variable costs and $615,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Cutting 612 Milling 285 Assembly 915 Actual number of employees for the most recent year 512 385 Long-run average number of employees 630 420 815 1,050 Required: 1. Calculate the Medical Services Department charges to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the Medical Services Department's actual costs should be treated as a spending variance and not charged to operating departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the Medical Services Department charges to each of the operating departments-Cutting, Milling, and Assembly. Medical services department charges Cutting Milling Assembly Korvanis Corporation operates a Medical Services Department that charges its variable costs to operating departments based on the actual number of employees in each department. It charges fixed costs to operating departments based on the long-run average number of employees. The Medical Services Department's variable costs are budgeted at $55 per employee and its fixed costs are budgeted at $609,700 per year. Actual Medical Services Department costs for the most recent year were $105,600 for variable costs and $615,000 for fixed costs. Data concerning employees in the three operating departments follow: Budgeted number of employees Cutting 612 Milling 285 Assembly 915 Actual number of employees for the most recent year 512 385 Long-run average number of employees 630 420 815 1,050 Required: 1. Calculate the Medical Services Department charges to each of the operating departments-Cutting, Milling, and Assembly. 2. How much, if any, of the Medical Services Department's actual costs should be treated as a spending variance and not charged to operating departments? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the Medical Services Department charges to each of the operating departments-Cutting, Milling, and Assembly. Medical services department charges Cutting Milling Assembly
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Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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