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 thebasis of the number of purchase requisitions. The Payroll Department had expenses of $63,568, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and GovernmentContract divisions were obtained from corporate records:GovernmentResidential CommercialContractSales$530,000$703,000$1,614,000Number of employees:Weekly payroll (52 weeks per year)1456570Monthly payroll344532Number of purchaserequisitions per year1,8001,3001,200a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.GovernmentResidentialCommercialTotalContractNumber of payroll checks:Weekly payrollMonthly payrollTotalNumber of purchase requisitions peryear: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. If required, roundyour answers to two decimal places. Do not round your interim calculations, round your answers to two decimal places, if required.Service department charge rates:Payroll Departmentpayroll distributionPurchasing Departmentper requisition ResidentialCommercialGovernment ContractTotalService department charges:Payroll DepartmentPurchasing DepartmentTotalc. Residential's service department charge is higherv number of check-issuing transactions.- v than the other two divisions because Residential is a heavy- v user of service department services. Residential has many employees on a weekly payroll, which translates intoa larger

Cost allocation refers to the process where the cost incurred by a service department is distributed…

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 $63,568, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 145 65 70 Monthly payroll 34 45 32 Number of purchase requisitions per year 1,800 1,300 1,200

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 $63,568, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Government Residential Commercial Contract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 145 65 70 Monthly payroll 34 45 32 Number of purchase requisitions per year 1,800 1,300 1,200

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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