Please show work. A department store apportions payroll costs on the basis of th
ID: 2500345 • Letter: P
Question
Please show work.
A department store apportions payroll costs on the basis of the number of payroll checks issued. Accounting costs are apportioned on the basis of the number of reports. The payroll costs for the year were $231,000 and the accounting costs for the year totaled $75,500. The departments and the average cost of store equipment and average cost of inventory for each are as follows:
Number of
Payroll Checks
Number
of Reports
Department R
483
70
Department S
1,470
85
Department T
147
345
Determine the amount of (a) payroll cost and (b) accounting cost to be apportioned to each department.
Number of
Payroll Checks
Number
of Reports
Department R
483
70
Department S
1,470
85
Department T
147
345
Explanation / Answer
Number of payrollcheck = 483 +1470 +147 = 2100
Cost per payroll check = 231,000 / 2100 = 110 per payroll
Number of reports = 70 +85 +345 =500
cost per report = 75500 / 500 = $ 151 per report
Allocation R S T Payroll cost 53130. [483*110] 161700 [1470*110] 16170 [147*110] Accounting cost 10570 [70*151] 12835 [85*151] 52095 [345*151]