In divisional income statements prepared for Iguana Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $42,750, and the Purchasing Department had expenses of $87,600 for the year. The following annual data for the Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $9,400,000 $6,800,000 $2,400,000 Number of employees: Weekly payroll (52 weeks per year) 80 60 25 Monthly payroll 20 10 5 Number of purchase requisitions per year 12,400 8,900 2,700 a. Determine the total amount of payroll checks and purchase requisitions processed per year by each division. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll 80 X 60 X 25 x Monthly payroll 20 X 10 X 5 X Total 100 X 70 X 30 x 200 X 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. Round charge rate answers to nearest cent. Payroll Department per check Purchasing Department per requisition Residential Commercial Government Contract Total Service department charges: Payroll Department 9,400,00 X 6,800,00 X 2,400,00 x 18,600,0 x Purchasing Department -20,900 X -15,390 X $ -6,460 X 42,750 x Total $ 9,333,84 X 6,752,12 x $ 2,383,68 x $ 18,469,6 x C. All of the following are possible reasons why the Residential Division has a larger service department charge than the other two divisions, except: a. Residential has more employees on a weekly payroll. b. Residential appears to require more frequent purchase transactions. c. The charge rate per activity is lower per unit for the Payroll department than it is for the Purchasing department. d. Residential appears to have more, smaller jobs that require more service assistance. Select the correct choice