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	$	83,200	Number of employees
Utilities		57,000	Square feet occupied
Insurance		26,000	Value of assets in use
Total	$	166,200

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

Department	Employees				Square Feet				Asset Values
Materials		45				42,500				$	6,700
Personnel		9				8,500					2,680
Manufacturing		81				102,000					36,180
Packaging		45				17,000					21,440
Total		180				170,000				$	67,000

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

• Required 1

SupervisionUtilitiesInsuranceTotalMaterialsPersonnelManufacturingPackagingTotals

Answer 1

Here you are with the solution - Allocation each of the Indirect Expenses across the four depts and assignment %