Question

In: Accounting

Indirect Costs Administration $ 1,345,203 Events Ticket Office $ 163,000 Events Video $ 415,442.00 Repair and...

Indirect Costs
Administration $ 1,345,203

Events Ticket Office

 $ 163,000
Events Video $ 415,442.00

Repair and Replacements

 $ 1,288,984.00

Events Conditioning and Medicine

 $ 717,062.00

Events Promotions

 $ 1,951,358.00

Events Development

 $ 566,840.00
Miscellaneous $ 345,000

Total Indirect Costs

 $

Use "number of events" as a basis to allocate Indirect costs

Events

Monday Events 10

Tuesday Events 40

Wednesday Events 50

Thursday Events 70

Friday Events 40

Saturday Events 80

Sunday Events 90

Solutions

Expert Solution

In order to allocate indirect costs:-

Step 1:- Calculate the total indirect costs

Particulars Amount
Administration         1,345,203
Events Ticket office           163,000
Events Video           415,442
Repairs & Replacements         1,288,984
Events conditioning and medicines           717,062
Events Promotions         1,951,358
Events Development           566,840
Miscellaneous           345,000
Total Indirect costs         6,792,889

Step 2:- Allocate Indirect costs

Total Indirect costs - $6,792,889

Day No.of events Indirect cost allotment
Monday Events 10                                                178,760.24
Tuesday Events 40                                                715,040.95
Wednesday Events 50                                                893,801.18
Thursday Events 70                                              1,251,321.66
Friday Events 40                                                715,040.95
Saturday Events 80                                              1,430,081.89
Sunday Events 90                                              1,608,842.13
Total 380 6,792,889

In order to calculate the Indirect cost allotment for any particular day, use the following formula

Total Indirect costs * (No.of events for the particular day)/Total Number of events

For example:- Indirect cost allocation to Wednesday is calculated by:-

$6,792,889 * 50/380 = $893,801.18

ekkarill92 answered 2 years ago
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