The following is a partially completed lower section of a departmental expense allocation...
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Accounting
The following is a partially completed lower section of a departmental expense allocation for Cozy Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five departments. Allocate the expenses of the two service departments (advertising and purchasing) to the three operating departments and provide the complete income statement. Expense Account Bal. $698.000 Advertising Dept. $24.000 Allocation of Expenses to Departments Purchasing Books Magazines Dept. Dept. Dept. $34.000 $425,000 $90.000 Newspapers Dept. $125.000 Allocation Base Total department expenses......... Service department expenses Advertising department... Sales Purchasing department....... Purch, orders Total expenses allocated to operating departments.......... ? ? ? ? ? ? ? ? $ ? ? ? Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Sales Purchase Orders Books .. Magazines.. Newspapers Total... $495,000 198,000 207,000 $900,000 516 360 324 1,200
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