Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $71,000 and for Purchasing is $78,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Sales Purchase Orders Books $ 201,600 1,225 725 550 2,500 Magazines 92,400 Newspapers 126,000 Total $ 420,000 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information.

Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $71,000 and for Purchasing is $78,900. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders. Department Sales Purchase Orders Books $ 201,600 1,225 725 550 2,500 Magazines 92,400 Newspapers 126,000 Total $ 420,000 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information.

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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