Domestic Check mMarks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the twooperating departments using different allocation bases. The following information is available for the current period:Allocation BasisNumber of employeesCost of goods soldPercentage of totalsalesOffice ExpensesSalariesDepreciationTotal$ 40,00026,000Advertising60,000 'DepartmentNumber of employeesDrilling1,800Grinding2,700Sales$ 352,000528,000Total4,500$ 880,000Cost of goods sold$ 110,200179,800$ 290,000The amount of salaries that should be allocated to Grinding for the current period is:

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College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 5SEB

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COMPUTING OPERATING INCOME The sales, cost of goods sold, and total operating expenses of departments A and B of Ash Company are as follows: Compute the departmental operating income for each department.
Service department charges In divisional income statements prepared for Demopolis 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 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?
Championship Sports Inc. operates two divisionsthe Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: The bases to be used in allocating expenses, together with other information, are as follows: a. Advertising expenseincurred at headquarters, allocated to divisions on the basis of usage: Winter Sports Division, 375,000; Summer Sports Division, 715,000. b. Transportation expenseallocated to divisions at a rate of 4.00 per bill of lading: Winter Sports Division, 17,500 bills of lading; Summer Sports Division, 30,500 bills of lading. c. Accounts receivable collection expenseincurred at headquarters, allocated to divisions at a rate of 1.00 per invoice: Winter Sports Division, 25,000 sales invoices; Summer Sports Division, 43,000 sales invoices. d. Warehouse expenseallocated to divisions on the basis of floor space used in storing division products: Winter Sports Division, 60,000 square feet; Summer Sports Division, 90,000 square feet. Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Provide supporting computations for support department allocations.
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Allocation Basis Number of employees Office Expenses Salaries Total $ 31,000 Depreciation Advertising 21,000 41,000 Cost of goods sold Percentage of total sales Department Number of employees Drilling Grinding Total 800 1,200 2,000 $ 79,800 130,200 $ 210,000 The amount of depreciation that should be allocated to Grinding for the current period is: Sales $ 330,000 Cost of goods sold 495,000 $ 825,000
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The following is a partially completed lower section of a departmental expense allocation spreadsheet for Superior Inc. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Assembly. Purchasing Maintenance Fabrication Assembly Operating costs $43,000 $24,600 $107,000 $73,000 No. of purchase orders 14 6. Sq. ft. of space 3,850 2,150 Multiple Choice $8,815. $30,100. $12,300. $12,900. ¢1に 70に
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Interdepartment Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Direct department cost Number of employees Gross payroll Personnel Payroll Housewares Clothing Furniture $7,300 $3,800 $12,300 $20,000 $15,650 5 Total costs $ 2 $6,100 $2,800 Payroll 0 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) 12.5 X% (b) Determine the percentage of total Payroll Department services that was provided to the Personnel Department. (Round your answer…
Interdepartmental Services: Step Method O'Brian's Department Stores allocates the costs of the Personnel and Payroll departments to three retail sales departments, Housewares, Clothing, and Furniture. In addition to providing services to the operating departments, Personnel and Payroll provide services to each other. O'Brian's allocates Personnel Department costs on the basis of the number of employees and Payroll Department costs on the basis of gross payroll. Cost and allocation information for June is as follows: Personnel Payroll Housewares Clothing Furniture Direct department cost $ 7,800 $ 3,200 $ 12,200 $ 20,000 $ 16,750 Number of employees 5 4 8 16 4 Gross payroll $ 6,000 $ 3,300 $ 10,600 $ 17,400 $ 8,100 (a) Determine the percentage of total Personnel Department services that was provided to the Payroll Department. (Round your answer to one decimal place.) % (b) Determine the percentage of total Payroll Department services that was provided to the…
The following is a partially completed departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for its four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Maintenance department expense to be allocated to Fabrication. Operating costs No. of purchase orders Sq. ft. of space Multiple Choice O $6,400. $9,900. $8,100. $9,000. $25,600. Purchasing Maintenance Fabrication Assembly $32,000 $18,000 $96,000 16 3,300 $62,000 4 2,700
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office exApenses are alocated to the tavo opertng cene different allocatlon bases. The following Information is avallable for the current period: Office Expenses Salaries Total Allocation Basis Number of employees 44,000 Depreciation Advertising 21,000 Cost of goods Bold 44,000 Percentage of total sales Department Drilling Grinding Number of employees Sales Cost of goods sold 900 $ 350,000 $ 91,200 2,100 525,000 148,800 Total 3,000 $ 875,000 $ 240,000 The amount of depreciation that should be allocated to Drilling for the current period is: Multiple Choice $7,980. $13,020. $21,000. 8 of 25
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information available for the current period: Office Expenses Total Allocation Basis $ 50,000 Number of employees Cost of goods sold Salaries Depreciation Advertising 34,000 68,000 Net sales Item Drilling Grinding Total Number of employees 1,800 $388,000 $582,000 $970, 000 $140,600 $229,400 $370, 000 2,700 4,500 Net sales Cost of goods sold The amount of the total office expenses that should be allocated to Drilling for the current period is:

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