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	$	70,000	Number of employees
Utilities		64,000	Square feet occupied
Insurance		17,000	Value of assets in use
Total	$	151,000

    

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

    

Department	Employees			Square Feet			Asset Values
Materials		18			29,000		$	34,000
Personnel		8			4,700			1,200
Manufacturing		65			50,000			38,300
Packaging		32			13,500			14,800
Total		123			97,200		$	88,300

   

(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

Requirement 1
Allocation of Indirect expenses to Four Departments
Supervision expenses
Department	Employees	% of Total	Cost
Materials	18	14.63	10,244
Personnel	8	6.50	4,553
Manufacturing	65	52.85	36,992
Packaging	32	26.02	18,211
Totals	123	100.00	70,000
Utilities expenses
Department	Square Feet	% of Total	Cost
Materials	29000	29.84	19,095
Personnel	4700	4.84	3,095
Manufacturing	50000	51.44	32,922
Packaging	13500	13.89	8,889
Totals	97200	100.00	64,000
Insurance expenses
Department	Asset Values	% of Total	Cost
Materials	34000	38.51	6,546
Personnel	1200	1.36	231
Manufacturing	38300	43.37	7,374
Packaging	14800	16.76	2,849
Totals	88300	100.00	17,000
Requirement 2
Summary table of indirect Expenses assigned to Departments
	Supervision	Utilities	Insurance	Total
Materials	10,244	19,095	6,546	35,884
Personnel	4,553	3,095	231	7,879
Manufacturing	36,992	32,922	7,374	77,287
Packaging	18,211	8,889	2,849	29,950
Totals	70,000	64,000	17,000	1,51,000