Lindon Hospital Has a Food Services Department That Provides Meals

question 33

Multiple Choice

Lindon Hospital has a Food Services Department that provides meals for all patients in the hospital. Budgeted and actual meals served for June follow: Gunnison Foods has two operating departments, Processing and Packaging. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are allocated to the operating departments on the basis of the number of employees. Data for last year follow: The budgeted costs of the Housekeeping Department were $40,800 and the actual costs were $44,980. The budgeted variable cost of meals for June was $75,000; the actual variable cost of meals for the month was $97,500.
-How much Housekeeping Department cost should have been charged to Packaging at the end of last year for performance evaluation purposes?

• A)$26,988
• B)$25,600
• C)$17,340
• D)$27,680

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Definitions:

Manufacturing Process

The sequence of operations involved in transforming raw materials into finished products.

Tangible Components

These are the physical assets of a business or product which can be seen, touched, and measured.

Manufacturing Cost

The total expense incurred in the process of producing a product, including raw materials, labor, and overhead costs.

General and Administrative

Expenses related to the day-to-day operations of a business that are not directly tied to production, including salaries of non-production staff, office supplies, and rent.