Performance Eval

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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Performance Eval - Decentralized Ops: The pictures contain all the information. Thanks!

b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and
purchasing services. Do not round interim calculations. Round your answers to two decimal places.
Support department allocation rates:
Payroll Department
per distribution
Purchasing Department
per requisition
Residential
Commercial
Government Contract
Total
Support department allocations:
Payroll Department
Purchasing Department
Total
$
$
Transcribed Image Text:b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Round your answers to two decimal places. Support department allocation rates: Payroll Department per distribution Purchasing Department per requisition Residential Commercial Government Contract Total Support department allocations: Payroll Department Purchasing Department Total $ $
Cost Department Allocations
In divisional income statements prepared for Demopolis 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 $39,728, and the Purchasing Department had expenses of $13,630 for the year.
The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:
Residential
Commercial
Government Contract
Sales
$ 285,000
$ 378,000
$ 867,000
Number of employees:
Weekly payroll (52 weeks per year)
210
70
75
Monthly payroll
36
47
34
Number of purchase requisitions per year
2,000
1,400
1,300
Required:
a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.
Residential
Commercial
Government Contract
Total
Number of payroll checks:
Weekly payroll x 52
Monthly payroll x 12
Total
Number of purchase requisitions per year
Transcribed Image Text:Cost Department Allocations In divisional income statements prepared for Demopolis 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 $39,728, and the Purchasing Department had expenses of $13,630 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 285,000 $ 378,000 $ 867,000 Number of employees: Weekly payroll (52 weeks per year) 210 70 75 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,000 1,400 1,300 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial Government Contract Total Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Number of purchase requisitions per year
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