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Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential Commercial Government Contract $327,000 $434,000 $996,000 Support department allocations: Payroll Department Purchasing Department Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Commercial Government Contract Total 175 32 2,300 Residential Residential 65 43 1,600 Number of purchase requisitions per year b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Ro your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 000 per distribution per requisition 70 30 1,500 Commercial 100 Government Contract Total 000 Total services, Residential has many employees on a weekly payroll, which transla

Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential Commercial Government Contract $327,000 $434,000 $996,000 Support department allocations: Payroll Department Purchasing Department Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Commercial Government Contract Total 175 32 2,300 Residential Residential 65 43 1,600 Number of purchase requisitions per year b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Ro your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 000 per distribution per requisition 70 30 1,500 Commercial 100 Government Contract Total 000 Total services, Residential has many employees on a weekly payroll, which transla

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 5E: Service department charges In divisional income statements prepared for Demopolis Company, the...
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Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential $ 327,000 Support department allocations: Payroll Department Purchasing Department 175 32 2,300 Total Commercial $ 434,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract 65 43 1,600 Residential Government Contract $996,000 Number of purchase requisitions per year b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Roun your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 70 30 per distribution per requisition 1,500 Commercial Government Contract Total because Residential is al Total user of support department services. Residential has many employees on a weekly payroll, which translates
Transcribed Image Text:Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential $ 327,000 Support department allocations: Payroll Department Purchasing Department 175 32 2,300 Total Commercial $ 434,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract 65 43 1,600 Residential Government Contract $996,000 Number of purchase requisitions per year b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Roun your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 70 30 per distribution per requisition 1,500 Commercial Government Contract Total because Residential is al Total user of support department services. Residential has many employees on a weekly payroll, which translates
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