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Exercise 22-3 Service department expenses allocated to operating departments P2 The following is a partially completed lower section of a departmental expense allocation spreadsheet for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five depart- ments. Complete the spreadsheet by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. B G 1 Allocation of Expenses to Departments Expense Account Balance $698,000 4 Advertising Dept. $24,000 Purchasing Dept. $34,000 Books Dept. $425,000 Magazines Newspapers Dept. Dept. $90,000 $125,000 Allocation Base 5 Total department expenses......... 6 Service department expenses Advertising department......... Sales Purchasing department Purch, orders Total expenses allocated to operating departments............. ? ? ? ? ? ? ? $ 0 $ O ? ? ? Continued on next page... Chapter 22 Performance Measurement and Responsibility Accounting Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operat- Purchase Orders Sales ing departments follows. Department 516 360 324 1,200 $495,000 198,000 207,000 $900,000 Check Total expenses allocated to books dept, $452,820 Books Magazines Newspapers Total... denartment and the cosmetics department of a retail store. She Exercise 22-4 tocks merchandise in both departments. The store Indirect payroll expe on the time worked in the two allocated to departc intments. Allocate P2