In divisional income statements prepared for Wilborne Construction Company, the Pay-roll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $ 119,280, and the Purchasing Department had expenses of $ 57,750 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:

a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
b. Using the activity base information in (a), determine the annual amount of payroll and purchasing costs charged back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services.
c. Why does the Residential Division have a larger service department charge than the other two divisions, even though its sales arelower?

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Residential Commercial Government Contract Sales Numberofemployees $900,000 $1,218,750 $2,800,000 Weekly payroll (52 weeks per year) Monthly payroll 250 50 3,750 125 100 3,125 150 60 2,750 Number of purchase requisitions pe