ervice Department Charges 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 $53,344, 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: Residential Commercial Government Contract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 110 60 65 Monthly payroll 28 39 26 Number of purchase requisitions per year 1,800 1,300 1,200
ervice Department Charges 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 $53,344, 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: Residential Commercial Government Contract Sales $530,000 $703,000 $1,614,000 Number of employees: Weekly payroll (52 weeks per year) 110 60 65 Monthly payroll 28 39 26 Number of purchase requisitions per year 1,800 1,300 1,200
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
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 $53,344, 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:
Residential | Commercial | Government Contract |
|||||
Sales | $530,000 | $703,000 | $1,614,000 | ||||
Number of employees: | |||||||
Weekly payroll (52 weeks per year) | 110 | 60 | 65 | ||||
Monthly payroll | 28 | 39 | 26 | ||||
Number of purchase | |||||||
requisitions per year | 1,800 | 1,300 | 1,200 |
![Residential
Commercial
Government Contract
Total
Service department charges:
Payroll Department
2$
Purchasing Department
Total
$4
c. Residential's service department charge is
than the other two divisions because Residential is a
user of service
department services. Residential has many employees on a weekly payroll, which translates into a
number of check-issuing transactions.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa57c9261-be87-4739-9b11-83c401f4f7d1%2F654bf05c-7683-4f6a-b86d-beae8f8ab430%2F97xxs5e_processed.png&w=3840&q=75)
Transcribed Image Text:Residential
Commercial
Government Contract
Total
Service department charges:
Payroll Department
2$
Purchasing Department
Total
$4
c. Residential's service department charge is
than the other two divisions because Residential is a
user of service
department services. Residential has many employees on a weekly payroll, which translates into a
number of check-issuing transactions.
![a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Government
Residential
Commercial
Total
Contract
Number of payroll checks:
Weekly payroll
Monthly payroll
Total
Number of purchase requisitions per
year:
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, round your 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 Department
payroll distribution
Purchasing Department
per requisition](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa57c9261-be87-4739-9b11-83c401f4f7d1%2F654bf05c-7683-4f6a-b86d-beae8f8ab430%2Fr8vuk7_processed.png&w=3840&q=75)
Transcribed Image Text:a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Government
Residential
Commercial
Total
Contract
Number of payroll checks:
Weekly payroll
Monthly payroll
Total
Number of purchase requisitions per
year:
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, round your 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 Department
payroll distribution
Purchasing Department
per requisition
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