Question 1

Gretter Corporation has two operating divisions--an Atlantic Division and a Pacific Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $36 per shipment.The Logistics Department's fixed costs are budgeted at $399,600 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand.  At the end of the year,actual Logistics Department variable costs totaled $305,040 and fixed costs totaled $418,680.The Atlantic Division had a total of 2,600 shipments and the Pacific Division had a total of 5,600 shipments for the year.For performance evaluation purposes,how much actual Logistics Department cost should NOT be charged to the operating divisions at the end of the year?

Accepted Answer

A)   $28,920
B)   $9,840
C)   $19,080
D)   $0E) All of the above
F) None of the above

Question 2

Cannata Corporation has two operating divisions--a North Division and a South Division.The company's Logistics Department services both divisions.The variable costs of the Logistics Department are budgeted at $32 per shipment.The Logistics Department's fixed costs are budgeted at $372,300 for the year.The fixed costs of the Logistics Department are determined based on peak-period demand.
  At the end of the year,actual Logistics Department variable costs totaled $335,000 and fixed costs totaled $382,850.The North Division had a total of 4,700 shipments and the South Division had a total of 5,300 shipments for the year.
Required:
a.Prepare a report showing how much of the Logistics Department's costs should be charged to each of the operating divisions at the end of the year.
b.How much of the actual Logistics Department costs should not be charged to the operating divisions at the end of the year? Who should be held responsible for these uncharged costs?

Accepted Answer

a.The operating divisions would be charg...

Question 3

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

Accepted Answer

A)   Budgeted rate x Budgeted activity.
B)   Budgeted rate x Actual activity.
C)   Actual rate x Actual activity.
D)   Budgeted total cost x Percentage of peak-period capacity required.E) B) and C)
F) All of the above

Question 4

For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

Accepted Answer

A) True 
 B)False

Exam 27: Service Department Charges

Correct Answer
verified

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

Correct Answer
verified

For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

Correct Answer
verified

Correct Answer
verified
a.The operating divisions would be charg...
View Answer

Exam 27: Service Department Charges

Correct AnswerverifiedShow Answer

Variable service department costs should be charged to operating departments at the end of the period according to the formula:

Correct AnswerverifiedShow Answer

For performance evaluation purposes,any variance over budgeted fixed costs in a service department should be the responsibility of the service department and should not be charged to the departments that use the service.

Correct AnswerverifiedShow Answer

Correct Answerverifieda.The operating divisions would be charg...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a.The operating divisions would be charg...
View Answer