26. Ready Company has two operating (production) departments: Assembly and Paint

Question

26. Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 366 employees and occupies 62,000 square feet; Painting has 280 employees and occupies 46,800 square feet. Indirect factory expenses for the current period are as follows:

Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of administration expense that should be allocated to the Assembly Department for the current period is:

A. $61,642.

B. $77,500.

C. $139,000.

D. $146,000.

PLEASE ADD EXPLANATION

Explanation / Answer

Answer:- The total amount of administration expense that should be allocated to the Assembly Department for the current period is $61642 (Part A)

Explanation:- Administration is allocated based on workers in each department.

Number of employees in Assembly department = 366 employees

Total number of employees in both operating (production) department:-

=366+280 = 646 employees

Total amount of administration expense that should be allocated to the Assembly Department =Administration expense*Employees in Assembly Department/Total employees

                    = $108800*366 employees/646 employees

                    =$61642

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

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