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Service Department Charges

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 $$37,272,$ and the Purchasing Department had expenses of $$17,400$ for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:

Residential

Commercial Government

Contract

Sales $ $364,000$ $ $482,000$ $ $1,107,000$

Number of employees:

Weekly payroll $(52$ weeks per year$)2056065$

Monthly payroll $384936$

Number of purchase

requisitions per year $2,5001,8001,700$

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 fill in the blank $1$

fill in the blank $2$

fill in the blank $3$

Monthly payroll fill in the blank $4$

fill in the blank $5$

fill in the blank $6$

Total fill in the blank $7$

fill in the blank $8$

fill in the blank $9$

fill in the blank $10$

Number of purchase requisitions per year fill in the blank $11$

fill in the blank $12$

fill in the blank $13$

fill in the blank $14$

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. Do not round your interim calculations, round your answers to two decimal places, if required.

Service department charge rates:

Payroll Department $fill in the blank $15$

per payroll check

Purchasing Department $fill in the blank $16$

per purchase requisition

Residential Commercial Government Contract Total

Service department charges:

Payroll Department $fill in the blank $17$

$fill in the blank $18$

$fill in the blank $19$

$fill in the blank $20$

Purchasing Department fill in the blank $21$

fill in the blank $22$

fill in the blank $23$

fill in the blank $24$

Total $fill in the blank $25$

$fill in the blank $26$

$fill in the blank $27$

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 payroll transactions.

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