Question

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	$	82,600	Number of employees
Utilities		51,000	Square feet occupied
Insurance		23,000	Value of assets in use
Total	$	156,600

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

Department	Employees				Square Feet				Asset Values
Materials		24				22,000				$	6,100
Personnel		6				11,000					1,830
Manufacturing		48				55,000					36,600
Packaging		42				22,000					16,470
Total		120				110,000				$	61,000

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.

Use this information to allocate each of the three indirect expenses across the four departments.

Supervision expenses Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Number of employees Numerator Denominator % of Total Materials 24 0 Personnel 6 0 Manufacturing 48 0 0 Packaging 42 0 0 Totals 120 0 Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Materials 0 Personnel 0 Manufacturing 0 0 Packaging 0 0 Totals 0 Insurance Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Materials 0 Personnel 0 Manufacturing 0 0 Packaging 0 0 Totals 0

Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

	Supervision Utilities Insurance Total Materials $0 Personnel 0 Manufacturing 0 Packaging 0 Totals $0 $0 $0 $0

Answer 1