In: Accounting
Assigning Traceable Fixed Expenses
Selected data for Miller Company, which operates three departments,
follow:
Department A | Department B | Department C | ||
---|---|---|---|---|
Inventory | $80,000 | $288,000 | $112,000 | |
Equipment (average cost) | $720,000 | $432,000 | $288,000 | |
Payroll | $405,000 | $360,000 | $135,000 | |
Square feet of floor space | 18,000 | 9,000 | 3,000 |
During the year, the company’s fixed expenses included the following:
Depreciation on equipment | $140,000 | |||
Real estate taxes | 48,000 | |||
Personal property taxes (on inventory and equipment) | 28,800 | |||
Personnel department expenses | 225,000 |
Assume that the property tax rate is the same for both inventory and equipment. Using the most causally related bases, prepare a schedule assigning the fixed expenses to the three departments. Hint: Not all fixed expenses are traceable to the three departments. One of these fixed costs should be considered a common cost and not traceable to the departments.
Do not round until your final answer. Round final answer to the nearest whole number.
Department A | Department B | Department C | ||
---|---|---|---|---|
Depreciation | Answer | Answer | Answer | |
Real estate taxes | Answer | Answer | Answer | |
Personal property taxes | Answer | Answer | Answer | |
Personnel dept. expenses | Answer | Answer | Answer |