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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

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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 $69,300, and the Purchasing Department had expenses of $22,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 460,000 $ 609,000 $ 1,399,000 Number of employees: Weekly payroll (52 weeks per year) 245 85 90 Monthly payroll 32 43 30 Number of purchase requisitions per year 2,100 1,500 1,400 Required: 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 x 52 Monthly payroll x 12 Total Number of purchase requisitions per year
b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Round your answers to two decimal places. Support department allocation rates: Payroll Department $ per distribution Purchasing Department per requisition Residential Commercial Government Contract Total Support department allocations: Payroll Department $ Purchasing Department Total $ $
c. Residential's support department allocations are than the other two divisions because Residential is a user of support department services. Residential has many employees on a weekly payroll, which translates into a number of payroll transactions.