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Problem V - 20 Points Klingon Company operates a free cafeteria for the benefit of its employees. Budgeted and actual costs in the cafeteria for last year are given below: Budgeted Actual Variable costs $200,000 $168,000 Fixed costs $480,000 $504,000 The variable costs of the cafeteria are allocated to operating departments on the basis of the number of employees in these departments. Data concerning last year are given below: Machining Assembly Budgeted number of employees 60 100 Actual number of employees 40 80 Percentage of peak-period requirements 40% 60% The level of budgeted fixed costs in the cafeteria is determined by the peak-period requirements. Required: A. Compute the dollar amount of variable and fixed cost that should have been allocated to each of the operating departments at the beginning of last year for planning purposes. B. Compute the dollar amount of the variable and fixed costs that should have been charged to each of the operating departments at the end of last year for purposes of evaluating performance. Identify the amount, if any, of actual cafeteria costs that should not be charged to the operating departments.
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