Eimnedcaion.comhm.tpx Advertising and purchasing department expenses of Cozy Boo

Question

Eimnedcaion.comhm.tpx Advertising and purchasing department expenses of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. The purchasing department had total expenses of $58,300 and the advertising department had total expenses of $75,000 Information about the allocation bases for the three operating departments follows Orders Books Magazines Newspapers 150,000 1580 945 84,000 66,000875 Total 300,000 3.500 Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments (see the expenses below) tising Allocation Base Cost to be allocated Allocated Cost Department Numerator | Denominator % of Total Books Dept Magazines Dept Newspapers Dept Totals Purchasing Cost to be allocated Allocated Cost Allocation Base Departmet Numerator | Denominator | % of Total Books Dept Magazines Dept Newspapers Dep Totals

Explanation / Answer

Solution:

Advertising Allocation base Percent of allocation base Cost to be allocated Allocated Cost Numerator Denominator % of total Department: Books Deptt Dollar Sales $150,000.00 $300,000.00 50% $75,000.00 $37,500.00 Magzine Deptt Dollar Sales $84,000.00 $300,000.00 28% $75,000.00 $21,000.00 Newspaper Deptt Dollar Sales $66,000.00 $300,000.00 22% $75,000.00 $16,500.00

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