Question

Won Han 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	$	71,000	Number of employees
Utilities		58,000	Square feet occupied
Insurance		16,900	Value of assets in use
Total	$	145,900

    

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

    

Department	Employees			Square Feet			Asset Values
Materials		17			26,000		$	54,000
Personnel		5			4,000			1,400
Manufacturing		65			47,000			37,900
Packaging		31			13,900			15,200
Total		118			90,900		$	108,500

   

(1)	Use this information to allocate each of the three indirect expenses across the four departments. (Round your intermediate and final answers to the nearest whole dollar. Omit the "$" & "%" signs in your response.)

   

Supervision expenses
Department	% of Total	Cost
Materials	%	$
Personnel
Manufacturing
Packaging
Totals	%	$

   

Utilities expenses
Department	% of Total	Cost
Materials	%	$
Personnel
Manufacturing
Packaging
Totals	%	$

   

Insurance expenses
Department	% of Total	Cost
Materials	%	$
Personnel
Manufacturing
Packaging
Totals	%	$

  

(2)	Prepare a summary table that reports the indirect expenses assigned to each of the four departments. (Round your intermediate and final answers to the nearest whole dollar. Omit the "$" sign in your response.)

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

Answer 1

• All working forms part of the answer
• Requirement 1

Supervision expenses	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	Number of employees	17	118	14%	$               71,000.00	$       10,228.81
Personnel	Number of employees	5	118	4%	$               71,000.00	$          3,008.47
Manufacturing	Number of employees	65	118	55%	$               71,000.00	$       39,110.17
Packaging	Number of employees	31	118	26%	$               71,000.00	$       18,652.54
Totals		118	118	100%	$               71,000.00	$       71,000.00
		Percent of Allocation Base
Utilities	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	SquareFeet	26000	90900	29%	$               58,000.00	$       16,589.66
Personnel	SquareFeet	4000	90900	4%	$               58,000.00	$          2,552.26
Manufacturing	SquareFeet	47000	90900	52%	$               58,000.00	$       29,989.00
Packaging	SquareFeet	13900	90900	15%	$               58,000.00	$          8,869.09
Totals		90900	90900	100%	$               58,000.00	$       58,000.00
		Percent of Allocation Base
Insurance	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	Asset Values	54000	108500	50%	$               16,900.00	$          8,411.06
Personnel	Asset Values	1400	108500	1%	$               16,900.00	$             218.06
Manufacturing	Asset Values	37900	108500	35%	$               16,900.00	$          5,903.32
Packaging	Asset Values	15200	108500	14%	$               16,900.00	$          2,367.56
Totals		108500	108500	100%	$               16,900.00	$       16,900.00

• Requirement 2

SUMMARY

	Supervision	Utilities	Insurance	Total
Materials	$               10,228.81	$        16,589.66	$            8,411.06	$               35,229.53
Personnel	$                  3,008.47	$           2,552.26	$                218.06	$                5,778.79
Manufacturing	$               39,110.17	$        29,989.00	$            5,903.32	$               75,002.49
Packaging	$               18,652.54	$           8,869.09	$            2,367.56	$               29,889.19
Totals	$               71,000.00	$        58,000.00	$          16,900.00	$           1,45,900.00