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Sharp Motor Company has two operating divisions-an Auto Division and a Truck Division. The company has a cafeteria that serve
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Answer #1
1 Auto Division Truck Division
Total cost charged $           99,000 $                                   70,200
2 Total cost allocated $           96,100 $                                   96,100
Workings:
1 Auto Division Truck Division
Variable cost $           48,600 (54000*0.9) $ 48,600 (54000*0.9)
Add: Fixed cost $           50,400 (72000*0.70) $ 21,600 (72000*0.30)
Total cost charged $           99,000 $ 70,200
2 Auto Division Truck Division
Actual Variable cost $           58,100 [116200*(54000/108000)] $ 58,100 [116200*(54000/108000)]
Add: Actual Fixed cost $           38,000 [76000*(54000/108000)] $ 38,000 [76000*(54000/108000)]
Total cost allocated $           96,100 $ 96,100
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