Leslie Company operates a cafeteria for the benefit of its employees. The company subsidizes the cafeteria heavily by allowing employees to purchase meals at greatly reduced prices. Budgeted and actual costs in the cafeteria for the year just ended are as follows: BudgetedActualVariable costs*$895,645? $779,280? Fixed costs$403,000? $409,700? *Unrecovered cost after deducting amounts received from employees.Costs of the cafeteria are charged to producing departments on the basis of the number of employees in these departments. Fixed costs are charged on the basis of the percentage of peak-period requirements. Data concerning the company's producing departments follows: MachiningAssemblyTotalBudgeted number of employees 335? 950? 1285? Actual number of
employees 205? 815? 1020? Percentage of peak-period requirements 30?% 70?% 100?%Required:a. Compute the dollar amount of variable and fixed costs that should be charged to each of the producing departments at the end of the year for purposes of evaluating performance.Amount to be chargedMachiningAssemblyVariable cost??Fixed cost??b. Identify the amount, if any, of actual costs that should not be charged to the operating departments.?Variable CostFixed CostAmount not to be charged??
What will be an ideal response?
a.
| Amount to be charged | Machining | Assembly |
| Variable cost | $142,885? | $568,055? |
| Fixed cost | $120,900? | $282,100? |
| ? | Variable Cost | Fixed Cost |
| Amount not to be charged | $68,340? | $6700? |
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Carlin Company, which uses net present value to analyze investments, requires a 10% minimum rate of return. A staff assistant recently calculated a $500,000 machine's net present value to be $86,400, excluding the impact of straight-line depreciation.FV of 1 (i=10%, n=5):1.611FV of a series of $1 cash flows (i=10%, n=5):6.105 PV of $1 (i=10%; n = 5): 0.621PV of a series of $1 cash flows (i=10%, n=5):3.791 If Carlin ignores income taxes and the machine is expected to have a five-year service life, the correct net present value of the machine would be:
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