Question: Please only answer the top row in the image, total cost charge, as my numbers are incorrect. Sharp Motor Company has two operating divisions -

Please only answer the top row in the image, total cost charge, as my numbers are incorrect. Sharp Motor Company has two operating divisions-an Auto Division and a Truck Division. The company has a cafeteria that serves
the employees of both divisions. The costs of operating the cafeteria are budgeted at $88,000 per month plus $0.40 per meal served.
The company pays all the cost of the meals.
The fixed costs of the cafeteria are determined by peak-period requirements. The Auto Division is responsible for 70% of the peak-
period requirements, and the Truck Division is responsible for the other 30%.
For June, the Auto Division estimated it would need 90,000 meals served, and the Truck Division estimated it would need 60,000
meals served. However, due to unexpected layoffs of employees during the month, only 60,000 meals were served to the Auto
Division. Another 60,000 meals were served to the Truck Division as planned.
The cafeteria's actual fixed costs for June totaled $94,000 and its actual meal costs totaled $65,000.
Required:
How much cafeteria cost should be charged to each division for June?
Assume the company follows the practice of allocating all cafeteria 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?
(Round your intermediate calculations to 2 decimal places.)
 Please only answer the top row in the image, total cost

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!