Advertising department expenses of $42,800 and purchasing department expenses of

Question

Advertising department expenses of $42,800 and purchasing department expenses of $32,100 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation ba three operating departments follows. Magazines Newspapers Total s 180,000 188,000 112,000 1,170 520 910 2,600 480,000 Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the th Complete this question by entering your answers in the tabs below. Exp operating to be up

Explanation / Answer

Advertising Allocation Base Percent of allocation Base Cost to be allocated Allocated cost Department Numerator Denominator % of total Books Dollar sales 180000 400000 45 42800 19260 Magazines Dollar sales 108000 400000 27 42800 11556 Newspapers Dollar sales 112000 400000 28 42800 11984 Totals 42800 Purchasing Allocation Base Percent of allocation Base Cost to be allocated Allocated cost Department Numerator Denominator % of total Books Purchase orders 1170 2600 45 32100 14445 Magazines Purchase orders 520 2600 20 32100 6420 Newspapers Purchase orders 910 2600 35 32100 11235 Totals 32100 Departmental expense allocation spreadsheet Expense totals Advertising Purchasing Books Magazines Newspapers Total department expenses 535000 42800 32100 112400 107000 240700 Service Deptt Expense Advertising Deptt -42800 19260 11556 11984 Purchasing Deptt -32100 14445 6420 11235 Total Expenses allocated 535000 0 0 146105 124976 263919

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