Business, 19.04.2021 15:10 joel4676

Korvanis Corporation operates a Medical Services Department for its employees. Charges to the company's operating departments for the variable costs of the Medical Services Department are based on the actual number of employees in each department. Charges for the fixed costs of the Medical Services Department are based on the long-run average number of employees in each operating department. Variable Medical Services Department costs are budgeted at $58 per employee. Fixed Medical Services Department costs are budgeted at $648,000 per year. Actual Medical Services Department costs for the most recent year were $105,400 for variable costs and $654,000 for fixed costs. Data concerning employees in the three operating departments follow:

Cutting Milling Assembly
Budgeted number of employees 604 286 904
Actual number of employees for the most recent year 504 386 804
Long-run average number of employees 1,170 780 1,950

Required:
a. Determine the Medical Services Department charges for the year to each of the operating departments' Cutting, Milling, and Assembly.
b. How much, if any, of the actual Medical Services Department costs for the year should not be charged to the operating departments?

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Korvanis Corporation operates a Medical Services Department for its employees. Charges to the compan...

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