Answered: Expenses allocated from the Purchasing…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 5SEA: COMPUTING OPERATING INCOME The sales, cost of goods sold, and total operating expenses of...

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Marcus Company has two service departments: Office and Purchasing. Total expenses for the Office is $60,000 and for Purchasing is $80,000. 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	$ 1,056,000	1,548
Magazines	422,400	1,080
Newspapers	441,600	972
Totals	$ 1,920,000	3,600

Expenses allocated from the Purchasing department to the company’s Newspaper department are:

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