Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $57,252, and the Purchasing Department had expenses of $22,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:
| Residential | Commercial | Government Contract |
|||||
| Sales | $460,000 | $609,000 | $1,399,000 | ||||
| Number of employees: | |||||||
| Weekly payroll (52 weeks per year) | 205 | 65 | 70 | ||||
| Monthly payroll | 36 | 47 | 34 | ||||
| Number of purchase | |||||||
| requisitions per year | 2,100 | 1,500 | 1,400 | ||||
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 | ||||
| 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 |
| Residential | Commercial | Government Contract | Total | |||||
| Service department charges: | ||||||||
| Payroll Department | $ | $ | $ | $ | ||||
| Purchasing Department | ||||||||
| Total | $ | $ | $ | |||||
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.
Homework Answers
Solution:
| Part a) | ||||
| Particulars | Residential | Commercial | Government Contract | Total |
| Number of Payroll Checks: | ||||
| Weekly Payroll (Payroll x 52) | 10660 | 3380 | 3640 | 17,680 |
| Monthly Payroll (Payroll x 12) | 432 | 564 | 408 | 1,404 |
| Total No. of payroll checks | 11,092 | 3,944 | 4,048 | |
| Number of Purchase Requisition per year | 2,100 | 1,500 | 1,400 |
| Part b & c | ||||
| Service department charge rates: | Working | |||
| Payroll Department | $3 | $57252 / 19084 | ||
| Purchasing Department | $4.40 | $22000 / 5000 | ||
| Service Department Charges | Residential | Commercial | Government Contract | Total |
| Payroll Department | (11092*$3)=$33276 | (3944*$3)=$11832 | (4048*$3)= $12144 | $57,252 |
| Purchase Department | (2100*$4.4)=$9240 | (1500*$4.1)=$6600 | (1400*$4.4)=$6160 | $22,000 |
| Total | $42,516 | $18,432 | $18,304 | |
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Service Department Charges
In divisional income statements prepared for LeFevre Company,
the Payroll Department costs are...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $82,464, and the Purchasing Department had expenses of $35,990 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $75,296, and the Purchasing Department had expenses of $39,530 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $55,692, and the Purchasing Department had expenses of $23,320 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $60,156, and the Purchasing Department had expenses of $20,680 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $59,808, and the Purchasing Department had expenses of $18,920 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs...
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 $89,568, and the Purchasing Department had expenses of $27,730 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $74,544, and the Purchasing Department had expenses of $31,270 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $28,752, and the Purchasing Department had expenses of $17,690 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
Service Department Charges in divisional income statements prepared for Lefevre Company, the Payroll Department costs are...
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 $69,232, and the Purchasing Department had expenses of $31,270 for the year. The following annual data for Residential Commercial, and Government Contract divisions were obtaine from corporate...
Service Department Charges In divisional income statements prepared for LeFevre Company, the Payroll Department costs are...
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 $67,264, and the Purchasing Department had expenses of $33,630 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $55,692, and the Purchasing Department had expenses of $23,320 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $60,156, and the Purchasing Department had expenses of $20,680 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $59,808, and the Purchasing Department had expenses of $18,920 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $89,568, and the Purchasing Department had expenses of $27,730 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $74,544, and the Purchasing Department had expenses of $31,270 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $28,752, and the Purchasing Department had expenses of $17,690 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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 $69,232, and the Purchasing Department had expenses of $31,270 for the year. The following annual data for Residential Commercial, and Government Contract divisions were obtaine from corporate...
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 $67,264, and the Purchasing Department had expenses of $33,630 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate...
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