Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
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
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 $50,448, and the Purchasing Department had expenses of $23,760 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 497,000 $ 658,000 $ 1,511,000 Number of employees: 160 65 70 Weekly payroll (52 weeks per year) Monthly payroll 38 49 36 DO Number of purchase requisitions per year 2,300 1,600 1,500 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 Total Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total 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. Round your answers to two decimal places, Support department allocation rates: Payroll Department per distribution Purchasing Department per requisition Residential Commercial Government Contract Total Support department allocations: Payroll Department Purchasing Department Total $ user of c. Residential's support department allocations are than the other two divisions because Residential is a support department services, Residential has many employees on a weekly payroll, which translates into a number of payroll transactions
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started