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Exercise 9-5 Departmental expense allocations LO P2 Woh Che Co. has four departments: materials, personnel, manufacturing,...

Exercise 9-5 Departmental expense allocations LO P2

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 $ 84,100 Number of employees
Utilities 66,000 Square feet occupied
Insurance 30,500 Value of assets in use
Total $ 180,600


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

Department Employees Square Feet Asset Values
Materials 40 31,000 $ 7,600
Personnel 8 15,500 2,280
Manufacturing 64 77,500 50,160
Packaging 48 31,000 15,960
Total 160 155,000 $ 76,000


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.

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ekkarill92 answered 2 years ago
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