Exercise 9-3 Service department expenses allocated to operating departments LO P

Question

Exercise 9-3 Service department expenses allocated to operating departments LO P2 Advertising department expenses of $38.900 and purchasing department expenses of $38,900 of Cory Bookstore are alloceted to operating departments on the basis of dollar sales and purchase orders, respectively Information about the allocation beses for the three operating departments follows Sales $ 180,300 sPurchase Orders Books Magazines Newspapers Total 984 603 816 2,400 108,822 5 368,9ae omplete the following table by allocating the expenses oftne two service depertments (advertising and opereting depotments purenasngi tomemree Complet e this question by entering your answers in the tabs below.

Explanation / Answer

Advertising Percent of Allocation Base Cost to be Allocated Allocation base Num. Den. % of Total Allocated Cost Department: Books Sales $ 180000 360000 50% 38900 19450 Magazines Sales $ 108000 360000 30% 38900 11670 Newspaper Sales $ 72000 360000 20% 38900 7780 360000 360000 100% 38900 38900 Purchasing Percent of Allocation Base Cost to be Allocated Allocation base Num. Den. % of Total Allocated Cost Department: Books Purchase orders 984 2400 41% 38900 15949 Magazines Purchase orders 600 2400 25% 38900 9725 Newspaper Purchase orders 816 2400 34% 38900 13226 2400 2400 100% 38900 38900 DEPARTMENT EXPENSE ALLOCATION SHEET EXPENSE ADVERT. PURCHASING BOOKS MAGAZINES NEWSPAPER TOTAL Total departmental expense 555000 38900 38900 144300 111000 221900 Sservice deptt expense Advertising deptt -38900 19450 11670 7780 Purchasing deptt -38900 15949 9725 13226 Total expense allocated 555000 0 0 179699 132395 242906

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