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Using the data from the Terrace Industries:
District 1 District 2
Sales $300,000 $600,000
Cost of goods sold 120,000 150,000
Selling expenses 55,000 75,000
Service department expenses:
Purchasing $70,000
Payroll accounting 80,000
Allocate service department expenses proportional to the sales of each district. Determine the divisional income from operations for Districts 1 and 2. For interim calculations, round percentages to three decimal places and all other amounts to the nearest whole dollar.

Respuesta :

TomShelby

Answer:

Purchasing 70,000 x 1/3 = $23,333 DISTRICT 1

Purchasing 70,000 x 2/3 = $46,667 DISTRICT 2

Payroll 80,000 x1/3 = $26,667 DISTRICT 1

Payroll 80,000 x 2/3 = $53,333 DISTRICT 2

Explanation:

Sales 300,000 + 600,000 = 900,000

District 1 300,000/900,000 = 1/3

District 2 600,000/900,000 = 2/3

Purchasing 70,000 x 1/3 = 23,333

Purchasing 70,000 x 2/3 = 46,667

Payroll 80,000 x1/3 = 26,667

Payroll 80,000 x 2/3 = 53,333

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