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 $66,976, and the Purchasing Department had expenses of $31,860 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Residential Commercial Government Contract $666,000 $883,000 $2,026,000 Weekly payroll (52 weeks per year) 160 65 70 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,300 1,600 1,500 Required: < a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Number of payroll checks: Weekly payroll x 52 Residential Commercial Government Contract Total Monthly payroll x 12 Total 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.
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 $66,976, and the Purchasing Department had expenses of $31,860 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Residential Commercial Government Contract $666,000 $883,000 $2,026,000 Weekly payroll (52 weeks per year) 160 65 70 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,300 1,600 1,500 Required: < a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Number of payroll checks: Weekly payroll x 52 Residential Commercial Government Contract Total Monthly payroll x 12 Total 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $66,976, and the Purchasing Department had expenses of $31,860 for the year. The following annual data for Residential, Commercial, and Government Contract
divisions were obtained from corporate records:
Sales
Number of employees:
Residential Commercial
Government Contract
$666,000
$883,000
$2,026,000
Weekly payroll (52 weeks per year)
160
65
70
Monthly payroll
36
47
34
Number of purchase requisitions per year
2,300
1,600
1,500
Required:
<
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Number of payroll checks:
Weekly payroll x 52
Residential
Commercial
Government Contract
Total
Monthly payroll x 12
Total
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.
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