Exercise 22-3 Service department expenses allocated to operating departments LO P2

Advertising department expenses of $75,000 and purchasing department expenses of $58,300 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	Sales			Purchase Orders
Books	$	150,000			1,680
Magazines		84,000			945
Newspapers		66,000			875
Total	$	300,000			3,500

Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

omplete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

Advertising	Allocation Base	Percent of Allocation Base			Cost to be Allocated	Allocated Cost
Department		Numerator	Denominator	% of Total
Books
Magazines
Newspapers
Totals
Purchasing	Allocation Base	Percent of Allocation Base			Cost to be Allocated	Allocated Cost
Department		Numerator	Denominator	% of Total
Books
Magazines
Newspapers
Totals

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	Magazines	Newspapers
Total department expenses	$833,000	$75,000	$58,300	$174,900	$166,600	$358,200
Service Dept. Expenses
Advertising Dept.
Purchasing Dept.
Total expenses allocated	$833,000