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

Requirement 1
Allocation of Indirect expenses to Four Departments
Supervision expenses
Department	Employees	% of Total	Cost
Materials	17	14.41	10,229
Personnel	5	4.24	3,008
Manufacturing	65	55.08	39,110
Packaging	31	26.27	18,653
Totals	118	100.00	71,000
Utilities expenses
Department	Square Feet	% of Total	Cost
Materials	26000	28.60	16,590
Personnel	4000	4.40	2,552
Manufacturing	47000	51.71	29,989
Packaging	13900	15.29	8,869
Totals	90900	100.00	58,000
Insurance expenses
Department	Asset Values	% of Total	Cost
Materials	54000	49.77	8,411
Personnel	1400	1.29	218
Manufacturing	37900	34.93	5,903
Packaging	15200	14.01	2,368
Totals	108500	100.00	16,900
Requirement 2
Summary table of indirect Expenses assigned to Departments
	Supervision	Utilities	Insurance	Total
Materials	10,229	16,590	8,411	35,230
Personnel	3,008	2,552	218	5,779
Manufacturing	39,110	29,989	5,903	75,002
Packaging	18,653	8,869	2,368	29,889
Totals	71,000	58,000	16,900	1,45,900