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

• 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	18	123	15%	$               70,000.00	$       10,243.90
Personnel	Number of employees	8	123	7%	$               70,000.00	$          4,552.85
Manufacturing	Number of employees	65	123	53%	$               70,000.00	$       36,991.87
Packaging	Number of employees	32	123	26%	$               70,000.00	$       18,211.38
Totals		123	123	100%	$               70,000.00	$       70,000.00
		Percent of Allocation Base
Utilities	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	SquareFeet	29000	97200	30%	$               64,000.00	$       19,094.65
Personnel	SquareFeet	4700	97200	5%	$               64,000.00	$          3,094.65
Manufacturing	SquareFeet	50000	97200	51%	$               64,000.00	$       32,921.81
Packaging	SquareFeet	13500	97200	14%	$               64,000.00	$          8,888.89
Totals		97200	97200	100%	$               64,000.00	$       64,000.00
		Percent of Allocation Base
Insurance	Allocation Base	Numerator	Denomintator	% of total	Costs to be allocated	Allocated Cost
Departments:
Materials	Asset Values	34000	88300	39%	$               17,000.00	$          6,545.87
Personnel	Asset Values	1200	88300	1%	$               17,000.00	$             231.03
Manufacturing	Asset Values	38300	88300	43%	$               17,000.00	$          7,373.73
Packaging	Asset Values	14800	88300	17%	$               17,000.00	$          2,849.38
Totals		88300	88300	100%	$               17,000.00	$       17,000.00

• Requirement 2: SUMMARY

	Supervision	Utilities	Insurance	Total
Materials	$               10,243.90	$        19,094.65	$            6,545.87	$               35,884.42
Personnel	$                  4,552.85	$           3,094.65	$                231.03	$                 7,878.53
Manufacturing	$               36,991.87	$        32,921.81	$            7,373.73	$               77,287.41
Packaging	$               18,211.38	$           8,888.89	$            2,849.38	$               29,949.65
Totals	$               70,000.00	$        64,000.00	$          17,000.00	$           1,51,000.00