Question

Woh Che Co. has four departments: Materials, 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		Cost	Allocation Base
Supervision	$	82,700	Number of employees
Utilities		52,000	Square feet occupied
Insurance		23,500	Value of assets in use
Total	$	158,200

Departmental data for the company’s recent reporting period follow.

Department	Employees				Square Feet				Asset Values
Materials		26				30,000				$	9,300
Personnel		13				12,000					2,480
Manufacturing		52				66,000					37,820
Packaging		39				12,000					12,400
Total		130				120,000				$	62,000

1. Use this information to allocate each of the three indirect expenses across the four departments.
2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

Supervision expenses Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Materials 0 Personnel 0 Manufacturing 0 0 Packaging 0 0 Totals 0 Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Materials 0 Personnel 0 Manufacturing 0 0 Packaging 0 0 Totals 0 Insurance Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Materials 0 Personnel 0 Manufacturing 0 0 Packaging 0 0 Totals 0

	Supervision Utilities Insurance Total Materials $0 Personnel 0 Manufacturing 0 Packaging 0 Totals $0 $0 $0 $0

Answer 1