Lucia Company has two service departments: Office and Purchasing. Total expenses for the Office is $75,000 and for Purchasing is $58,300. 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 Books Magazines Newspapers Total Sales $ 150,000 84,000 66,000 $ 300,000 Purchase Orders 1,680 945 875 3,500 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 $75,000 and for Purchasing is $58,300. 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 Books Magazines Newspapers Total Sales $ 150,000 84,000 66,000 $ 300,000 Purchase Orders 1,680 945 875 3,500 Allocate the expenses from (a) the Office and (b) Purchasing to each of the company's three operating departments using the given information.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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