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

image text in transcribed
image text in transcribed
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 $53,136, and the Purchasing Department had expenses of $19,360 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $405,000 $536,000 $1,231,000 Number of employees: Weekly payroll (52 weeks per year) 170 70 25 Monthly payroll 45 32 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 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 Residential Commercial Government Contract Total Service department charges: Payroll Department Purchasing Department 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

Step: 3

blur-text-image

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

Auditing And Other Assurance Services

Authors: Alvin Arens, James Loebbecke, W Lemon, Ingrid Splettstoesser

9th Canadian Edition

0130091243, 978-0130091246

More Books

Students also viewed these Accounting questions

Question

Explain why employees join unions.

Answered: 1 week ago

Question

Discuss breakdowns in the negotiations process.

Answered: 1 week ago