Advertising department expenses of $31,600 and purchasing department expenses of $63,300 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. DepartmentSales Purchase OrdersBooks$200,000 552 Magazines 84,000 348 Newspapers 116,000 300 Total$400,000 1,200 Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

Advertising department refers to the part of business which is responsible for advertising.…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Advertising department expenses of $31,600 and purchasing department expenses of $63,300 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows.

Department	Sales		Purchase Orders
Books	$	200,000		552
Magazines		84,000		348
Newspapers		116,000		300
Total	$	400,000		1,200

Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.

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