he following situations provide practice in allocating monthly overhead expenses

Question

he following situations provide practice in allocating monthly overhead expenses at a central office. From the information given in the following table, complete the allocations indicated in the problem. Remember: Answers for the following problem should sum to the total monthly overhead expense.

Allocate utilities expense based on the number of machine hours worked in each location.

Monthly Overhead Total Location Expense Expense Basis of Allocation East West North South TOTAL Insurance $20,000 Square feet 19,200 9,600 14,400 16,800 60,000 Utilities 35,000 Machine hours worked 37,310 11,830 26,390 15,470 91,000 Rent 26,000 Units produced 10,200 7,800 5,700 6,300 30,000 Maintenance 22,000 Number of employees 105 75 30 90 300

Explanation / Answer

for east

Machine hr worked = 37310/91000 = 0.41

Amount = 0.41*35000 = $14350

for west

Machine hr worked = 11830/91000 = 0.13

Amount = 0.13*35000 = $4550

for north

Machine hr worked = 26390/91000 = 0.29

Amount = 0.29*35000 = $10150

for south

Machine hr worked = 15470/91000 = 0.17

Amount = 0.17*35000 = $5950

Check = $14350 + $4550 + $10150 + $5950 = $35000

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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