Scuderi Corporation has two operating divisions-an Inland Division and a Coast D

Question

Scuderi Corporation has two operating divisions-an Inland Division and a Coast Division. The company's Customer Service Department provides services to both divisions. The variable costs of the Customer Service Department are budgeted at $30 per order. The Customer Service Department's fixed costs are budgeted at $474,000 for the year. The fixed costs of the Customer Service Department are determined based on the peak period orders

At the end of the year, actual Customer Service Department variable costs totaled $239,295 and fixed costs totaled $476,350. The Inland Division had a total of 1,585 orders and the Coast Division had a total of 5,940 orders for the year.

Required:

Prepare a report showing how much of the Customer Service Department's costs that should be charged to each of the operating divisions at the end of the year. (Omit the "$" sign in your response)

How much of the actual Customer Service Department costs should not be charged to the operating divisions at the end of the year? (Omit the "$" sign in your response)

$         

Please show work. Thank you.

Percentage of Peak Period Capacity Required Budgeted Orders   Inland Division 35% 1,550   Coast Division 65% 5,990

Explanation / Answer

Details Inland Division Coast Division Total Actual no of Orders                       1,585                        5,940              7,525 Budgeted Orders                       1,550                        5,990              7,540 Actual Variable cost @$30 per order                     47,550                   178,200          225,750 Actual Variable cost incurred          239,295 Budgeted Fixed cost            474,000 Actual Fixed cost          476,350 Fixed costs should be allocated as per budgeted a Cost Allocation   Inland Division Coast Division Total Variable costs                     47,550                   178,200          225,750 Fixed cost (35% & 65% ratio of Budgeted cost)                  165,900                   308,100          474,000 Amount To be charged                  213,450                   486,300          699,750 b Amount not to be charged Total Amt Variable costs                     13,545 Fixed costs                       2,350 Total Amt not to be charges $                     15,895

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