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Cost Department Allocations 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 $50,232, and the Purchasing Department had expenses of $19,360 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential $ 405,000 Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year 160 36 1,900 Commercial $ 536,000 65 47 1,300 Government Contract $ 1,231,000 70 34 1,200 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

Cost Department Allocations 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 $50,232, and the Purchasing Department had expenses of $19,360 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential $ 405,000 Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year 160 36 1,900 Commercial $ 536,000 65 47 1,300 Government Contract $ 1,231,000 70 34 1,200 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

FINANCIAL ACCOUNTING
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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Cost Department Allocations 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 $50,232, and the Purchasing Department had expenses of $19,360 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Residential $ 405,000 160 36 1,900 Commercial $ 536,000 65 47 1,300 Government Contract $ 1,231,000 70 34 1,200 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Transcribed Image Text:Cost Department Allocations 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 $50,232, and the Purchasing Department had expenses of $19,360 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Residential $ 405,000 160 36 1,900 Commercial $ 536,000 65 47 1,300 Government Contract $ 1,231,000 70 34 1,200 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Government Contract Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Show Transcribed Text Support department allocations: Payroll Department Purchasing Department Total 8,320 ✔ 432 ✔ 8,752 ✔ Residential 1,900✔ 1,300 ✓ 1,200 ✓ Number of purchase requisitions per year 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. Do not round interim calculations. Round your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 3.00 per distribution 4.386 X per requisition 26,256 ✔ 8,334 X 34,590 X Commercial $ 3 3,380 ✔ 564 ✓ 3,944 ✔ Commercial c 11,832 ✓ 5,702 X 3,640 ✔ 408 ✔ 4,048 ✔ 17,534 X Government Contract 12,144 ✓ 5,264 X 17,408 X Total $ 16,744 ✔ 4,400 ✓ Total 19,300 X 69,532 X c. Residential's support department allocations are higher ✔than the other two divisions because Residential is a heavy ✔user of support department services. Residential has many employees on a weekly payroll, which translates into a larger ✔number of payroll transactions.
Transcribed Image Text:Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Government Contract Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Show Transcribed Text Support department allocations: Payroll Department Purchasing Department Total 8,320 ✔ 432 ✔ 8,752 ✔ Residential 1,900✔ 1,300 ✓ 1,200 ✓ Number of purchase requisitions per year 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. Do not round interim calculations. Round your answers to two decimal places. Support department allocation rates: Payroll Department Purchasing Department 3.00 per distribution 4.386 X per requisition 26,256 ✔ 8,334 X 34,590 X Commercial $ 3 3,380 ✔ 564 ✓ 3,944 ✔ Commercial c 11,832 ✓ 5,702 X 3,640 ✔ 408 ✔ 4,048 ✔ 17,534 X Government Contract 12,144 ✓ 5,264 X 17,408 X Total $ 16,744 ✔ 4,400 ✓ Total 19,300 X 69,532 X c. Residential's support department allocations are higher ✔than the other two divisions because Residential is a heavy ✔user of support department services. Residential has many employees on a weekly payroll, which translates into a larger ✔number of payroll transactions.
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