Reference no: EM132809301

The cafeteria of Menelaus S. Corporation provides foods service needs for employees in both operating departments of the company. Variable costs of the cafeteria are allocated based on the number of meals served to employees of each department in a given period. Fixed costs are budgeted to be 25% of total costs and are allocated based on the peak period needs of each operating department.

Data for last year are given below:

IT Training Department:

Actual Fixed Costs $19,850

Actual Variable Costs $40,100

Total Budgeted Costs $48,000

                           Operating Dept 1                  Operating Dept 2

Peak period needs   10,000 meals                  5,000 meals

Actual meals            8,884                         3,485

Budgeted meals        8,000                         4,000

Problem 1: What amount of the Menelaus's cafeteria's actual costs should not be allocated to the operating departments?