Answered step by step
Verified Expert Solution
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
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 $57,948, and the Purchasing Department had expenses of $25,080 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential $ 524,000 Commercial $ 695,000 Government Contract $1,595,000 Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year 2,400 1,700 1,600 Total 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 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. Service department charge rates: Payroll Department per payroll check Purchasing Department per purchase requisition Residential Commercial Government Contract Total Service department charges: Payroll Department Purchasing Department Total user of service department c. Residential's service department charge is than the other two divisions because Residential is a 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started