Service Department Allocations

In divisional income statements prepared for Lemons Company, the Payroll Department costs are allocated to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are allocated on the basis of the number of purchase requisitions. The Payroll Department had costs of $$65,748,$ and the Purchasing Department had expenses of $$23,320$ The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:

Residential Commercial Government

Contract

Sales $$487,000$ $$646,000$ $$1,483,000$

Number of employees:

Weekly payroll $(52$ weeks per year$)2358085$

Monthly payroll $283926$

Number of purchase

requisitions per year $2,2001,6001,500$

a$.$ Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

Residential Commercial Government

Contract Total

Number of payroll checks:

Weekly payroll fill in the blank $1$

fill in the blank $2$

fill in the blank $3$

Monthly payroll fill in the blank $4$

fill in the blank $5$

fill in the blank $6$

Total fill in the blank $7$

fill in the blank $8$

fill in the blank $9$

fill in the blank $10$

Number of purchase requisitions per year: fill in the blank $11$

fill in the blank $12$

fill in the blank $13$

fill in the blank $14$

b$.$ Using the cost driver information in $($a$),$ determine the annual amount of payroll and purchasing costs allocated back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations.

Service department allocation rates:

Payroll Department $fill in the blank $15$

per distribution

Purchasing Department $fill in the blank $16$

per requisition

Residential Commercial Government Contract Total

Service department allocations:

Payroll Department $fill in the blank $17$

$fill in the blank $18$

$fill in the blank $19$

$fill in the blank $20$

Purchasing Department fill in the blank $21$

fill in the blank $22$

fill in the blank $23$

fill in the blank $24$

Total $fill in the blank $25$

$fill in the blank $26$

$fill in the blank $27$

c$.$ Residential's service department allocation 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.