Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $38,900 and for Purchasing is$38,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated tooperating departments based on purchase orders.DepartmentBooksMagazinesNewspapersTotalSales$ 180,000108,00072,000PurchaseOrders984600816$ 360,0002,400Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the giveninformation. OfficeAllocation BaseDepartmentPercent of Allocation BaseNumerator Denominator % of TotalCost to be Allocated Allocated CostBooks0Magazines0Newspapers0Totals0PurchasingAllocation BasePercent of Allocation BaseCost to be Allocated Allocated CostDepartmentNumerator Denominator % of TotalBooks0Magazines0Newspapers0Totals0

a).Expenses for the office are allocated to operating departments based on sales.OfficeAllocation…

Answered: Lucia Company has two service…

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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Boston Home Center (BHC) offers customers the use of a truck at $64 per trip to take purchased merchandise home. BHC reports the following information about the trucks it has for customer usage: Cost Driver Rate Cost Driver Volume Resources used Operation $ 0.55 per mile 46,200 miles Administration 25.00 per trip 1,874 trips Resources supplied Operation $ 35,400 Administration $ 62,400 Sales revenue totaled $80,000. Required: Prepare a traditional income statement. Prepare an activity-based income statement. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a traditional income statement. Traditional Income Statement Sales revenue Operation costs Administration costs Operating profit Activity-Based Income Statement Resources Used Unused Resource Capacity…
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The worksheet of Bridget's Office Supplies contains the following revenue, cost, and expense accounts. Prepare a classified income statement for this firm for the year ended December 31, 20X1. The merchandise inventory amounted to $59,675 on January 1, 20X1, and $52,625 on December 31, 20X1. The expense accounts numbered 611 through 617 represent selling expenses, and those numbered 631 through 646 represent general and administrative expenses. Accounts 401 Sales $ 248,200 Credit 451 Sales Returns and Allowances 4,340 Debit 491 Miscellaneous Income 390 Credit 501 Purchases 103,500 Debit 502 Freight In 1,965 Debit 503 Purchases Returns and Allowances 3,590 Credit 504 Purchases Discounts 1,790 Credit 611 Salaries Expense—Sales 45,200 Debit 614 Store Supplies Expense 2,300 Debit 617 Depreciation Expense—Store Equipment 1,500 Debit 631 Rent Expense 13,400 Debit 634 Utilities Expense 2,990 Debit 637 Salaries Expense—Office 21,000 Debit 640 Payroll Taxes…
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Macee Store has three operating departments, and it conducts advertising that benefits all departments. Advertising costs are $108,000. Sales for its operating departments follow. Department 2 Sales $ 272,500 523, 200 294,300 How much advertising cost is allocated to each operating department If the allocation is based on departmental sales? (Do not round your intermediate calculations.) Department Sales Percent of Total 1 2 3 Total % % % % Cost Allocated
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Woodbury Hospital provided the following data for its three service departments and three operating departments. Total cost Meals served Square feet of space. Files processed Service Department Housekeeping Services Food Services Administrative Services Service Departments Housekeeping Food Administrative Services Services $ 87,000 $ 301,060 Services $ 249,020 800 6,500 5,000 Departmental costs before allocations Allocations: Allocation Bases Square feet of space Meals served Files processed Housekeeping Services costs Food Services costs The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the following table: Administrative Services costs Total costs after allocations 13,000 All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospital's administrator wants the costs of the three service departments allocated to these three billing centers. Housekeeping Services $…

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