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	$	74,000	Number of employees
Utilities		59,000	Square feet occupied
Insurance		16,900	Value of assets in use
Total	$	149,900

    

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

    

Department	Employees			Square Feet			Asset Values
Materials		17			28,000		$	82,000
Personnel		4			4,600			1,100
Manufacturing		64			41,000			38,300
Packaging		29			13,600			15,500
Total		114			87,200		$	136,900

   

(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

		Percent of Allocation Base
Supervision expenses	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	Number of employees	17	114	15%	$               74,000.00	$       11,035.09
Personnel	Number of employees	4	114	4%	$               74,000.00	$          2,596.49
Manufacturing	Number of employees	64	114	56%	$               74,000.00	$       41,543.86
Packaging	Number of employees	29	114	25%	$               74,000.00	$       18,824.56
Totals		114	114	100%	$               74,000.00	$       74,000.00
		Percent of Allocation Base
Utilities	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	SquareFeet	28000	87200	32%	$               59,000.00	$       18,944.95
Personnel	SquareFeet	4600	87200	5%	$               59,000.00	$          3,112.39
Manufacturing	SquareFeet	41000	87200	47%	$               59,000.00	$       27,740.83
Packaging	SquareFeet	13600	87200	16%	$               59,000.00	$          9,201.83
Totals		87200	87200	100%	$               59,000.00	$       59,000.00
		Percent of Allocation Base
Insurance	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	Asset Values	82000	136900	60%	$               16,900.00	$       10,122.72
Personnel	Asset Values	1100	136900	1%	$               16,900.00	$             135.79
Manufacturing	Asset Values	38300	136900	28%	$               16,900.00	$          4,728.05
Packaging	Asset Values	15500	136900	11%	$               16,900.00	$          1,913.44
Totals		136900	136900	100%	$               16,900.00	$       16,900.00

• Requirement 2: SUMMARY

	Supervision	Utilities	Insurance	Total
Materials	$               11,035.09	$        18,944.95	$          10,122.72	$               40,102.76
Personnel	$                  2,596.49	$           3,112.39	$                135.79	$                 5,844.67
Manufacturing	$               41,543.86	$        27,740.83	$            4,728.05	$               74,012.74
Packaging	$               18,824.56	$           9,201.83	$            1,913.44	$               29,939.84
Totals	$               74,000.00	$        59,000.00	$          16,900.00	$           1,49,900.00