Exercise 09-3 Service department expenses allocated to operating departments LO P2 Advertising department expenses of $38,900 and purchasing department expenses of $38.900 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Books Magazines Newspapers Total Sales $180,000 108,000 72.000 $360,000 Purchase Orders 984 600 816 2.400 Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. Complete this question by entering your answers in the tabs below. Allocation of Exp Alloc of Serv Dept Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. Advertising Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator % of Total Department Complete this question by entering your answers in the tabs below. Allocation of Exp Alloc of Serv Dept Complete the following table by allocating the expenses of the two service departments (advertising and purchasing to the three operating departments. Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator % of Total Advertising Department Books Magazines Newspapers Totals Allocation Base Purchasing Department Books Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total Magazines Newspapers Totals Salon Alloc of Serv Dept > Complete this question by entering your answers in the tabs below. Allocation of Exp Alloc of Serv Dept Complete the spreadsheet by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. (Amounts to be deducted should be indicated with minus sign.) COZY BOOKSTORE Departmental Expense Allocation Spreadsheet Expense Totals Advertising Purchasing Books $ 555,000 $ 38,900 $ 38,900 $144,300 Magazines Newspapers $ 111,000 $ 221,900 Total department expenses Service Dept. Expenses Advertising Dept. Purchasing Dept. Total expenses allocated $ 555,000 Exercise 09-5 Departmental expense allocations LO P2 Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Supervision Utilities Insurance Total cost Allocation Base $ 83,300 Number of employees 58,000 square feet occupied 26,500 Value of assets in use $167,800 Departmental data for the company's recent reporting period follow. Employees Department Materials Personnel Manufacturing Packaging Total 19 Square Feet 54,000 18,000 81,000 27,000 180,000 Asset Values $ 6,800 3,400 37,400 20,400 $68,000 190 1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Use this information to allocate each of the three indirect expenses across the four departments, Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator % of Total Supervision expenses Department Materials Personnel Manufacturing Packaging Totals Utilities Department Materials Personnel Manufacturing Packaging Totals Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator of Total Cost to be Allocated Allocated Cost Allocation Base Insurance Department Percent of Allocation Base Numerator Denominator % of Total Materials Personnel Manufacturing Packaging Totals 1. Use this information to allocate each of the three indirect expenses across the four departments 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a summary table that reports the indirect expenses assigned to each of the four departments Supervision Utilities Insurance Total Materials Personnel Manufacturing Packaging Totals Prev 1 of 1 H Next > Required information Use the following information for the Exercises below. (The following information applies to the questions displayed below.) Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Electronics Sporting goods Sales Income $ 40,500,000 $2,916,000 20,740,000 2,074,000 Average Invested Assets $16,200,000 12,200,000 Exercise 09-10 Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? 2. Assume a target Income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company? 3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? Complete this question by entering your answers in the tabs below. U ue residual income for each department. Which department Hautesluual income for the company? 3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment Should the new investment opportunity be accepted? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company? Return on Investment 1 Choose Denominator: Choose Numerator: - Return on Investment Return on Investment Electronics Sporting Goods Which department is most efficient at using assets to generate returns for the company? Required Required 2 > Help so Required information 2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company? 3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment Should the new investment opportunity be accepted? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume a target Income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company? Sporting Goods Investment Center Electronics Net income Target net income Residual income Which department is most efficient at using assets to generate returns for the company?