Exercise 9-3 (Algo) Service department expenses allocated to operating departments LO P2 Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $88,600 and for Purchasing is $44,300. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Sales $ 202,400 Purchase Orders 861 123,200 609 114,400 630 Total $ 440,000 2,100 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Office Allocation Base Department Sales Books $ Magazines Newspapers Totals Percent of Allocation Base Numerator Denominator % of Total 202,400 $202,400 $440,000 46% $ 123,200 123,200 440,000 114,400 114,400 440,000 Cost to be Allocated Allocated Cost 28% 440,000 26% 100% 88,600 88,600 88,600 $ 88,600 Purchasing Allocation Base Department Number of orders Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Books 861 861 2,100 41% $ 44,300 Magazines 609 609 2,100 29% 44,300 Newspapers 630 630 2,100 30% 44,300 Totals 2,100 100% $ 44,300