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. Compute the amount of Purchasing department expense to be allocated to Fabrication. $20,350. $25,900. $11,100. $8,575. $12,425.

Explanation / Answer

correct option is "B" - 25900

Allocation to fabrication = 37000*14/(14+6)= 37000*14/20 =25900

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