Woh Che Co. has four departments: materisls, personnel, manufacturing, and packa
ID: 2557343 • Letter: W
Question
Woh Che Co. has four departments: materisls, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow. Indirect Expense Supervision Utilities Allocation Base Number of employees Square feet occupied Value of sssets in use Cost 5 82,500 54,000 24,500 181,000 Total Departmental data for the company's recent reporting period follow Department Employees Square Feet Asset Values Materials Personnel Manufacturing Packaging 36 49,000 5 6.400 14.000 56,000 21,000 3.840 32,640 21.120 38 Total 150 40,000 64.000Explanation / Answer
Answer
Percent of Allocation Base
Supervision expenses
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
Number of employees
36
150
24%
$ 82,500.00
$ 19,800.00
Personnel
Number of employees
9
150
6%
$ 82,500.00
$ 4,950.00
Manufacturing
Number of employees
66
150
44%
$ 82,500.00
$ 36,300.00
Packaging
Number of employees
39
150
26%
$ 82,500.00
$ 21,450.00
Totals
150
150
100%
$ 82,500.00
$ 82,500.00
Percent of Allocation Base
Utilities
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
SquareFeet
49000
140000
35%
$ 54,000.00
$ 18,900.00
Personnel
SquareFeet
14000
140000
10%
$ 54,000.00
$ 5,400.00
Manufacturing
SquareFeet
56000
140000
40%
$ 54,000.00
$ 21,600.00
Packaging
SquareFeet
21000
140000
15%
$ 54,000.00
$ 8,100.00
Totals
140000
140000
100%
$ 54,000.00
$ 54,000.00
Percent of Allocation Base
Insurance
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
Asset Values
6400
64000
10%
$ 24,500.00
$ 2,450.00
Personnel
Asset Values
3840
64000
6%
$ 24,500.00
$ 1,470.00
Manufacturing
Asset Values
32640
64000
51%
$ 24,500.00
$ 12,495.00
Packaging
Asset Values
21120
64000
33%
$ 24,500.00
$ 8,085.00
Totals
64000
64000
100%
$ 24,500.00
$ 24,500.00
Supervision
Utilities
Insurance
Total
Materials
$ 19,800.00
$ 18,900.00
$ 2,450.00
$ 41,150.00
Personnel
$ 4,950.00
$ 5,400.00
$ 1,470.00
$ 11,820.00
Manufacturing
$ 36,300.00
$ 21,600.00
$ 12,495.00
$ 70,395.00
Packaging
$ 21,450.00
$ 8,100.00
$ 8,085.00
$ 37,635.00
Totals
$ 82,500.00
$ 54,000.00
$ 24,500.00
$ 1,61,000.00
Percent of Allocation Base
Supervision expenses
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
Number of employees
36
150
24%
$ 82,500.00
$ 19,800.00
Personnel
Number of employees
9
150
6%
$ 82,500.00
$ 4,950.00
Manufacturing
Number of employees
66
150
44%
$ 82,500.00
$ 36,300.00
Packaging
Number of employees
39
150
26%
$ 82,500.00
$ 21,450.00
Totals
150
150
100%
$ 82,500.00
$ 82,500.00
Percent of Allocation Base
Utilities
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
SquareFeet
49000
140000
35%
$ 54,000.00
$ 18,900.00
Personnel
SquareFeet
14000
140000
10%
$ 54,000.00
$ 5,400.00
Manufacturing
SquareFeet
56000
140000
40%
$ 54,000.00
$ 21,600.00
Packaging
SquareFeet
21000
140000
15%
$ 54,000.00
$ 8,100.00
Totals
140000
140000
100%
$ 54,000.00
$ 54,000.00
Percent of Allocation Base
Insurance
Allocation Base
Numerator
Denominator
% of total
Costs to be allocated
Allocated Cost
Departments:
Materials
Asset Values
6400
64000
10%
$ 24,500.00
$ 2,450.00
Personnel
Asset Values
3840
64000
6%
$ 24,500.00
$ 1,470.00
Manufacturing
Asset Values
32640
64000
51%
$ 24,500.00
$ 12,495.00
Packaging
Asset Values
21120
64000
33%
$ 24,500.00
$ 8,085.00
Totals
64000
64000
100%
$ 24,500.00
$ 24,500.00
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