Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
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 payrol distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $70,272, and the Purchasing Department had expenses of $39,530 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $826,000 $1,095,000 $ 2,514,000 Number of employees: Weekly payroll (52 weeks per year) 140 85 90 Monthly payroll 30 41 28 Number of purchase requisitions per year 2,800 2,000 1,900 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 Number of payroll checks Weekly payroll x 52 Total Monthly payroll x 12 Total Number of purchase requisitions per year Residential Commercial Number of payroll checks: Weekly payroll x 52 Government Contract Total 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 Total Government Contract Support department allocations: Payroll Department Purchasing Department Total c. Residential's support department allocations are than the other two divisions because Residential is a user of 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

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance For Non-Finance People

Authors: Sandeep Goel

2nd Edition

0367185083, 9780367185084

More Books

Students also viewed these Accounting questions

Question

=+3. What are market presence strategies, and which can you name?

Answered: 1 week ago