In divisional income statements prepared for Iguana Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $46,248, and the Purchasing Department had expenses of $26,840 for the year. The following annual data for the Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $561,000 $743,000 $1,707,000 Number of employees: Weekly payroll (52 weeks per year) 130 70 75 Monthly payroll 28 39 26 Number of purchase requisitions per year 2,600 1,800 1,700 a. Determine the total amount of payroll checks and purchase requisitions processed per year by each division and the company in total. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll fill in the blank 1 fill in the blank 2 fill in the blank 3 Monthly payroll fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 Number of purchase requisitions per year fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 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. Round charge rate answers to nearest cent. Service department charge rates: Payroll Department $fill in the blank 15 per payroll check Purchasing Department $fill in the blank 16 per purchase requisition Residential Commercial Government Contract Total Service department charges: Payroll Department $fill in the blank 17 $fill in the blank 18 $fill in the blank 19 $fill in the blank 20 Purchasing Department $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 $fill in the blank 24 Total $fill in the blank 25 $fill in the blank 26 $fill in the blank 27 $fill in the blank 28

In divisional income statements prepared for Iguana Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $46,248, and the Purchasing Department had expenses of $26,840 for the year. The following annual data for the Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $561,000 $743,000 $1,707,000 Number of employees: Weekly payroll (52 weeks per year) 130 70 75 Monthly payroll 28 39 26 Number of purchase requisitions per year 2,600 1,800 1,700 a. Determine the total amount of payroll checks and purchase requisitions processed per year by each division and the company in total. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll fill in the blank 1 fill in the blank 2 fill in the blank 3 Monthly payroll fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 Number of purchase requisitions per year fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 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. Round charge rate answers to nearest cent. Service department charge rates: Payroll Department $fill in the blank 15 per payroll check Purchasing Department $fill in the blank 16 per purchase requisition Residential Commercial Government Contract Total Service department charges: Payroll Department $fill in the blank 17 $fill in the blank 18 $fill in the blank 19 $fill in the blank 20 Purchasing Department $fill in the blank 21 $fill in the blank 22 $fill in the blank 23 $fill in the blank 24 Total $fill in the blank 25 $fill in the blank 26 $fill in the blank 27 $fill in the blank 28

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 5E: Service department charges In divisional income statements prepared for Demopolis Company, the...

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Service Department Charges

	Residential	Commercial	Government Contract
Sales	$561,000		$743,000	$1,707,000
Number of employees:
Weekly payroll (52 weeks per year)	130		70	75
Monthly payroll	28		39	26
Number of purchase requisitions per year	2,600		1,800	1,700

a. Determine the total amount of payroll checks and purchase requisitions processed per year by each division and the company in total.

	Residential	Commercial	Government Contract	Total
Number of payroll checks:
	Weekly payroll	fill in the blank 1	fill in the blank 2	fill in the blank 3
	Monthly payroll	fill in the blank 4	fill in the blank 5	fill in the blank 6
		Total	fill in the blank 7	fill in the blank 8	fill in the blank 9	fill in the blank 10
Number of purchase requisitions per year	fill in the blank 11	fill in the blank 12	fill in the blank 13	fill in the blank 14

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. Round charge rate answers to nearest cent.

Service department charge rates:
	Payroll Department	$fill in the blank 15 per payroll check
	Purchasing Department	$fill in the blank 16 per purchase requisition

	Residential	Commercial	Government Contract	Total
Service department charges:
	Payroll Department	$fill in the blank 17	$fill in the blank 18	$fill in the blank 19	$fill in the blank 20
	Purchasing Department	$fill in the blank 21	$fill in the blank 22	$fill in the blank 23	$fill in the blank 24
		Total	$fill in the blank 25	$fill in the blank 26	$fill in the blank 27	$fill in the blank 28

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