Netton Bus Lines provides school bus service to two school districts: East and West.
Taylor has one support centre that is responsible for service, maintenance, and cleanup of its buses. The costs of the support centre are allocated to each district on the basis of total kilometres driven.
During the first month of the year, the support centre was expected to spend a total of $100,000. Of this total, $25,000 was viewed as being fixed.
During the month, the support centre incurred actual variable costs of $105,000 and actual fixed costs of $20,000.
The normal and actual kilometres logged by each district are given below: a. Compute the predetermined service cost per kilometre driven.
b. Compute the costs that would be allocated at the end of the month to each district for purposes of performance evaluation.
c. Determine the costs of the support centre that were not allocated to the two districts. Why were these costs not allocated to the districts?

Question

Netton Bus Lines provides school bus service to two school districts: East and West.
Taylor has one support centre that is responsible for service, maintenance, and cleanup of its buses. The costs of the support centre are allocated to each district on the basis of total kilometres driven.
During the first month of the year, the support centre was expected to spend a total of $100,000. Of this total, $25,000 was viewed as being fixed.
During the month, the support centre incurred actual variable costs of $105,000 and actual fixed costs of $20,000.
The normal and actual kilometres logged by each district are given below:  a. Compute the predetermined service cost per kilometre driven.
b. Compute the costs that would be allocated at the end of the month to each district for purposes of performance evaluation.
c. Determine the costs of the support centre that were not allocated to the two districts. Why were these costs not allocated to the districts?

Quizplus · Accepted Answer

The Answer of Netton Bus Lines provides school bus service to two school districts: East and West.
Taylor has one support centre that is responsible for service, maintenance, and cleanup of its buses. The costs of the support centre are allocated to each district on the basis of total kilometres driven.
During the first month of the year, the support centre was expected to spend a total of $100,000. Of this total, $25,000 was viewed as being fixed.
During the month, the support centre incurred actual variable costs of $105,000 and actual fixed costs of $20,000.
The normal and actual kilometres logged by each district are given below:  a. Compute the predetermined service cost per kilometre driven.
b. Compute the costs that would be allocated at the end of the month to each district for purposes of performance evaluation.
c. Determine the costs of the support centre that were not allocated to the two districts. Why were these costs not allocated to the districts?

Netton Bus Lines Provides School Bus Service to Two School