In divisional income statements prepared for LeFevre 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 $75,400 and the Purchasing Department had expenses of $42,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $1,000,000 $1,600,000 $3,200,000 Number of employees: Weekly payroll (52 weeks per year) 300 150 200 Monthly payroll 75 160 90 Number of purchase requisitions per 4,000 3,500 3,000 year a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll Monthly payrol Total Number of purchase requisitions per year: b. Using the activity base information in (a), determine the annual amount of payroll and purchasing costs charged back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Service department charge rates: Payroll Department per distribution Purchasing Department per requisition Residential Commercial Government Contract Total Service department charges: Payroll Department Purchasing Department Total
In divisional income statements prepared for LeFevre 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 $75,400 and the Purchasing Department had expenses of $42,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $1,000,000 $1,600,000 $3,200,000 Number of employees: Weekly payroll (52 weeks per year) 300 150 200 Monthly payroll 75 160 90 Number of purchase requisitions per 4,000 3,500 3,000 year a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll Monthly payrol Total Number of purchase requisitions per year: b. Using the activity base information in (a), determine the annual amount of payroll and purchasing costs charged back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Service department charge rates: Payroll Department per distribution Purchasing Department per requisition Residential Commercial Government Contract Total Service department charges: Payroll Department Purchasing Department Total
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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