Question
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of
Service Department Charges 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 $69,056, and the Purchasing Department had expenses of $27,730 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:
Government Residential Commercial Contract Sales $580,000 $763,000 $1,764,000 Number of employees: Weekly payroll (52 weeks per year) 170 65 70 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,000 1,400 1,300 a. Determine the total amount of payroll checks and purchase requlsitions 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 requiredStep by Step Solution
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