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In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number
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 $34,384, and the Purchasing Department had expenses of $19,430 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Government Residential Commercial Contract $406,000 $538,000 $1,236,000 150 75 80 34 45 32 2,000 2,000 1,900 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Number of payroll checks: Weekly payroll Residential Commercial Government Contract Total Monthly payroll Total Number of purchase requisitions per year 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. Do not round your interim calculations, round your answers to two decimal places, if required.
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