mework: Chapter $9$ HW

Question

Part $1$ of $6$

Completed: $5$ of $10$

My score: $5\mathrm{.}3/10$ pts $(52\mathrm{.}98\%)$

nize list

Question

$1/1$ pt

Q$9-7($book$/$static$)$

Cafe One operates a chain of $10$ hospitals in the Los Angeles area. Its central food$-$catering facility, Cafeman, prepares and delivers meals to the hospitals. It has the capacity deliver up to $1,025,000$ meals a year. In $2020,$ based on estimates from each hospital controller, Cafeman budgeted for $925,000$ meals a year. Budgeted fixed costs in $2020$ we $$1,517,000.$ Each hospital was charged $$6\mathrm{.}04$ per meal$-$ $$4\mathrm{.}40$ variable costs plus $$1\mathrm{.}64$ allocated budgeted fixed cost.

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In $2021$only $740,000$Cafemanmeals were produced and sold to the hospitals. Haywardsuspects that hospital controllers had systematically inflated their $2021$meal estimates.

Read the requirements.

Question $|\frac{1}{1}pt$

Q$9-12($book$/$static$)$

Requirement $1.$ Recall that Cafeman uses the master$-$budget capacity utilization to allocate fixed costs and to price meals. What was the effect of production$-$volume variance Question $|\frac{1}{1}pt$ Cafeman's operating income in $2021?$

Determine the formula, then compute the effect of production$-$volume variance on Cafeman operating income in $2021.($Abbreviation used: Bud. $=$ Budgeted.$)$

Q$9-14($book$/$static$)$

Question $|\frac{1}{1}pt$ Fixed cost allocated using master$-$budget capacity

Production$-$

$$

$1)=$ volume variance

$)=$

More info

Recently, the hospitals have been complaining about the quality of Cafeman's meals and their rising costs. In mid$-2020,$ Cafe One's president announces that all Cafe One hospitals and support facilities will be run as profit centers. Hospitals will be free to purchase quality$-$certified services from outside the system. Luke Hayward, Cafeman's controller, is preparing the $2021$ budget. He hears that three hospitals have decided to use outside suppliers for their meals, which will reduce the $2021$ estimated demand to $820,000$ meals.

No change in variable cost per meal or total fixed costs is expected in $2021.$