Leslie Company Operates a Cafeteria for the Benefit of Its

question 4

Essay

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:
*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:
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.
b. Identify the amount, if any, of actual costs that should not be charged to the operating departments.

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Definitions:

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Buyer Power

The influence that customers have over a producing industry, often determining the market value and ensuring that services and products meet their needs.

Buyers

Individuals or entities that purchase goods or services for personal use or organizational needs.

Choices

The range of different options or decisions from which an individual can select or make a decision.