Question

Part 1

Department Direct Expenses Square Feet Sales Advertising $ 20,000 1,680 Administrative 30,000 1,260 Shoes 128,000 10,290 $ 179,800 Clothing 19,000 7,770 130,200 The advertising department developed and distributed 130 advertisements during the year. Of these, 26 promoted shoes and 104 promoted clothing. Utilities expense of $75,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Coconut Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $75,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department’s expenses to the two operating departments on the basis of the number of ads placed that promoted a department’s products, and (4) the administrative department’s expenses to the two operating departments based on the amount of sales.

Answer 1

Answer:-

Utilities	Allocation Base	Percent of Allocation Base			Cost to be Allocated	Allocated Cost
Department	Floor Space	Numerator	Denominator	% of Total
Advertising	1680	1680	21000	8%	75000	6000
Administrative	1260	1260	21000	6%	75000	4500
Shoes	10290	10290	21000	49%	75000	36750
Clothing	7770	7770	21000	37%	75000	27750
Totals	21000					75000
Advertising	Allocation Base	Percent of Allocation Base			Cost to be Allocated	Allocated Cost
Department	Number of Ads	Numerator	Denominator	% of Total
Shoes	26	26	130	20%	20000	4000
Clothing	104	104	130	80%	20000	16000
Totals	130					20000
Administrative	Allocation Base	Percent of Allocation Base			Cost to be Allocated	Allocated Cost
Department	Amount of sales	Numerator	Denominator	% of Total
Shoes	179800	179800	310000	58%	30000	17400
Clothing	130200	130200	310000	42%	30000	12600
Totals	310000					30000

MARATHON RUNNING SHOP
Departmental Expense Allocation Spreadsheet
For Year Ended December 31, 2017
	Expense Totals	Advertising	Administrative	Shoes	Clothing
Direct expense	197000	20000	30000	128000	19000
Indirect utilities expenses	75000	6000	4500	36750	27750
Total dept. exp.	272000	26000	34500	164750	46750
Service Dept. Expenses
Advertising Dept.	20000	-20000	0	4000	16000
Administrative Dept.	30000	0	-30000	17400	12600
Total expenses allocated	50000	-20000	-30000	21400	28600

if you have any query please ask me in comment box i am here to helps you don't give direct Thumbs down.if you satisfied my work give Thumbs UP

                                                *******THANK YOU***