Help Save & E 3 Marathon Running Shop has two service departments (advertising a

Question

Help Save & E 3 Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017 24,000 182,000 10,000 770 1,320 4,628$273,800 4,290 Clothing 96,280 The advertising department developed and distributed 150 advertisements during the year. Of these, 15 promoted shoes and 135 promoted clothing. Utilities expense of $50,000 is an indirect expense to all departments. eferences Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign () direct expenses to each of the four departments, (2) the $50,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the a promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the s expenses to the two operating departments on the basis of the number of ads placed that amount of sales. Cost to be Percent of Allocation Bass Allocate of Total 70 770 11000 7.0 S 50,000$ 3,500 1320 11000 12.00 50,000 6.000 Prey 3 of 6 Next> pe here to

Explanation / Answer

Solution: Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Floor space occupied Numerator Denominator % of Total Advertising 1,540 1,540 14,000 11.00% 66,000 7,260 Administrative 700 700 14,000 5.00% 66,000 3,300 Shoes 5,180 5,180 14,000 37.00% 66,000 24,420 Clothing 6,580 6,580 14,000 47.00% 66,000 31,020 Totals 14,000 100.00% 66,000 Advertising Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Number of ads Numerator Denominator % of Total Shoes 23 23 230 10.00% 15000 1500 Clothing 207 207 230 90.00% 15000 13500 Totals 230 100.00% 15000 Administrative Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department sales Numerator Denominator % of Total Shoes 145600 145600 260000 56.00% 22000 12320 Clothing 114400 114400 260000 44.00% 22000 9680 Totals 260000 100.00% 22000 MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2015 Expense Totals Advertising Administrative Shoes Clothing Direct expense 174000 15000 22000 118000 19000 Indirect utilities expenses 66000 7,260 3,300 24,420 31,020 Total dept. exp. 240000 22260 25300 142420 50020 service Dept. Expenses Advertising Dept. (10:90) -22260 2226 20034 Administrative Dept. (56:44) -25300 14168 11132 Total expenses allocated 240000 0 0 158814 81186

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.