The payroll department costs are charged back to user


In divisional income statements prepared for Mills Construction Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll checks, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $84,832, and the Purchasing Department had expenses of $25,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 530,000 $ 703,000 $ 1,614,000 Number of employees: Weekly payroll (52 weeks per year) 240 70 75 Monthly payroll 30 41 28 Number of purchase requisitions per year 1,800 1,300 1,200 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 $ per check Purchasing Department $ per requisition Residential Commercial Government Contract Total Service department charges: Payroll Department $ $ $ $ Purchasing Department $ $ $ $ Total $ $ $

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Financial Management: The payroll department costs are charged back to user
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