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Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $31,600 and for Purchasing is $63,300. Expenses for the
Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $31,600 and for Purchasing is $63,300. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Books Magazines Newspapers Total Sales $ 200,000 Purchase Orders 552 84,000 116,000 $400,000 348 300 1,200 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information. Office Department Allocation Base Sales Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total Books $200,000 $ 400,000 50% Magazines 0 Newspapers 0 0 Totals Purchasing Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total 0 Books 0 Magazines 0 Newspapers Totals 0
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