The following is a partially completed lower section of a departmental expense a

Question

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Operating costs No. of purchase orders sq. ft. of space 32,000 $18,000 $96,000 $62,000 16 3,300 2,700 Compute the amount of Purchasing department expense to be allocated to Assembly.

Explanation / Answer

Amount of Purchasing department expense to be allocated to Assembly = 32000/(16+4)*4= $6400

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