four departments: materials, personnel, manufacturing, and packaging. In a recen

Question

four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred thr ee shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Supervision Utilities Insurance 83,200 Number of employees 57,000 Square feet occupied 26,000 Value of assets in use Total $166,200 Departmental data for the company's recent reporting period follow. EmployeesSquare Feet Asset Values Materials Personnel Manufacturing Packaging Total 42,500 8,500 102,000 17,000 170,000 $ 6,700 2, 680 36,180 21,440 $67,000 45 81 45 1. Use this information to allocate each of the three indirect expenses across the four departments 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

Explanation / Answer

26000

Supervision expenses Allocation Basis Percentage of allocation basis Cost to be allocated Allocated Cost Department Numerator Denominator % of Total Material No of employees 45 180 25.00% 83200 20800 Personnel No of employees 9 180 5.00% 83200 4160 Manufacturing No of employees 81 180 45.00% 83200 37440 Packaging No of employees 45 180 25.00% 83200 20800 Totals 83200

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