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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 of

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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 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 $40,224, and the Purchasing Department had expenses of $18,920 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Contract Residential Commercial Sales $ 395,000 $ 524,000 $ 1,203,000 Number of employees: Weekly payroll (S2 weeks per year) 110 60 65 Monthly payroll 30 41 28 Number of purchase requisitions per year 1,800 1,300 1,200 a. Determine the total amount of payroll checks and archase requisitions processed per year by the company and each division. Residential Commercial Government Contract Number of payroll checks Weekly payroll 5,720 3,120 3,380 Monthly payroll 360 492 336 Total 6,0807 3,612 3,716 Total 13,408 Number of purchase requisitions per year Total 6,080 3,612 3,716 13,408 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. Service department charge rates: Payroll Department X per payroll check Purchasing Department X per purchase requisition Residential Commercial Government Contract Total Service department charges: Payroll Department Purchasing Department Total Residential's service department charge is higher than the other two divisions because Residential is a heavy user of service department services, Residential as many employees on a weekly payroll, which translates into a larger number of payroll transactions

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