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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 $43,908, and the Purchasing Department had expenses of $28,160 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $589,000 $ 780,000 $1,791,000 Number of employees: Weekly payroll (52 weeks per year) 135 60 65 Monthly payroll 28 39 26 Number of purchase requisitions per year 2,700 1,900 1,800 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Government Residential Commercial Total 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. 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 The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Invested Income from Operations Assets Retail Division $90,300 $430,000 Commercial Division 60,000 250,000 Internet Division 62,400 240,000 a. Compute the return on investment for each division. (Round to the nearest whole number.) Division Percent Retail Division % Commercial Division % Internet Division % b. Which division is the most profitable per dollar invested
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