n divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged beck 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 s87,024, and the Purchasing Department had expenses of $29,500 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records Residential Commercial Government Contract Sales $617,000 $817,000 $1,876,000 Number of employees Weekly payroll (52 weeks per year) 235 75 80 Monthly payroll 38 49 36 amber of purchase requisitions per year 2,100 1,500 1,400 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Government Total Residential Commercial Contract Number of payroll checks: 4,160 3,900 12,220 Weekly payroll 588 432 456 Monthly payroll 4,592 21 756 4,488 12,676 Total 5.000 1400 1,500 Number of purchase 2,100 requisitions per year: b. Using the activity base information in (a), determine the annual amount of payol and purchang charged back to the Residential, Commercial, and Government Contract divisions from pay and services. If required, round your answers to two decimal places Do not round your answers to two decimal places, if required Service department charoe rates 24-3 Exercises& Problems Number of purchase 2,100 1,500 5,000 requisitions per year b. Using the activity base information in (a), determine the annual amount of pay 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: 4 Payroll Department payroll distribution 5.9 per requisition Purchasing Department Commercial Government Contract Total Residential ervice department charges: 48,880 X 15,600 X 16,640 X 87,0 Payroll Department 29,50 Purchasing Department 17,952 X 18,368 X 50,704 X Total than the other two divisions because Residential is c. Residential's service department charge is higher a heavy user of service department services. Residential has many employees on a weekly payroll, number of check-issuing transactions. which translates into a larger Feedback Check My Work a. Add the number of weekly and monthly payroll checks for each division. Add the number of requisitions for each division. b. Divide the Payroll and Purchasing expenses by the appropriate activity base from (a). Then apply the rate per activity by the actual checks and requisitions. c. Consider how each department functions within the business. Next 1 more Check My Work uses remaining. Check My Work
