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Klingon Company operates a free cafeteria for benefit of its employees. Budgeted and actual costs in cafeteria for last year are provided below:
Budgeted ActualVariable costs $200,000 $168,000Fixed costs $480,000 $504,000
The variable costs of cafeteria are allocated to operating departments on basis of the number of employees in these departments. Data concerning last year are provided below:Machining AssemblyBudgeted number of employees 60 100Percentage of peak-period requirements 40% 60%Actual number of employees 40 80
The level of budgeted fixed costs in the cafeteria is evaluated by the peak-period requirements.
Required:
A. Calculate the dollar amount of variable and fixed cost that should have been allocated to each of operating departments at the starting of last year for planning purposes.
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