Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of

In divisional income statements prepared for LeFevre 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 $43,456, and the Purchasing Department had expenses of $12,760 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $267,000 $353,000 $812,000 Number of employees: Weekly payroll (52 weeks per year) 230 80 85 Monthly payroll 30 41 28 Number of purchase requisitions per year 1,900 1,300 1,200 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 Monthly payroll Total Number of purchase requisitions per year: Residential Commercial Government Contract Total 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. If required, round your answers to two decimal places. Do not round your interim calculations, round your answers to two decimal places, if required. Service department charge rates: Payroll Department payroll distribution Purchasing Department $ per requisition Residential Service department charges: Payroll Department Purchasing Department Total $ Commercial Government Contract Total $ c. Residential's service department charge is than the other two divisions because Residential is a user of service department services. Residential has many employees on a weekly payroll, which translates into a number of check-issuing 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

Managerial Accounting Custom Publication

Authors: Belverd E. Needles

7th Edition

0618681922, 978-0618681921

More Books

Students also viewed these Accounting questions