my someone help resolve this problem. thank you Exercise 9-3 Service department
ID: 2472953 • Letter: M
Question
my someone help resolve this problem. thank you
Exercise 9-3 Service department expenses allocated to operating departments LO P2
Advertising department expenses of $25,000 and purchasing department expenses of $56,200 of Cozy Bookstore 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 $ 186,200 546 Magazines 95,000 364 Newspapers 98,800 390 Total $ 380,000 1,300
Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. (Amounts to be deducted should be indicated with minus sign.)
Explanation / Answer
Service Department Operating Department Advertising Purchasing Books Magazines Newspaper Total Expenses 25000 56200 Sales value 186200 95000 98800 380000 Expenses allocated -25000 12250 6250 6500 25000 (25000*186200/380000) (25000*95000/380000) (25000*98800/380000) Purchase orders 546 364 390 1300 Expenses allocated -56200 23604 15736 16860 56200 (56200*546/1300) (56200*364/1300) (56200*390/1300) Total expenses 0 0 35854 21986 23360 81200
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