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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Oo.77.
Subject :- Account
Transcribed Image Text: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.
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