Exercise 24-3 Service department expenses allocated to operating departments LO

Question

Exercise 24-3 Service department expenses allocated to operating departments LO P2 Advertsing department expenses of $36,600 and purchasing department expenses of $26,200 of Cozy Bookstore are allocated to operating departments on the basis of dolar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. $179,400 81,900 Nevspapers281100 $390,000 644 406 350 Books Magazines 1,400 Complete the tollowing table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. Complete this quesion by entering your answers in the tabs below Alloc of of Complete the spreadsheet 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.) Show lessA Departmenta Expense Expense Allocation Spreadsheet Advertising Purchasing Books Magazines Newspa S 523,000 S 36,600S 26,2004 146,400 104,600 209.200 expenses Service Dept. Advertising Dept. Purchasing Dept. Total expenses allocated S 523,000 S 36,600 S 26,200 1 146,400 104,600 209.200 Allocation of Exp Alloc of Serv Dept

Explanation / Answer

Expenses Total Adv Pur Books Magazine Newspaper Total Department Exp 523000 36600 26200 146400 104600 209200 Service dept exp Advertisement Dep 36600 16836 7686 12078 Purchase Dep 26200 12052 7598 6550 Total exp allocated 523000 36600 26200 146400 104600 209200 Advertisement Allocation Base Percentage of Allocation Base Cost to be Allocated Allocated Cost Department Sales Numerator Denominator %Total Books 179400 36600 390000 0.0938 16836 Magazine 81900 36600 390000 0.0938 7686 Newspaper 128700 36600 390000 0.0938 12078 Totals Purchasing Allocation Base Percentage of Allocation Base Cost to be Allocated Allocated Cost Department No. of order Numerator Denominator %Total Books 644 26200 1400 18.714 12052 Magazine 406 26200 1400 18.714 7598 Newspaper 350 26200 1400 18.714 6550

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