In: Accounting
Assigning Traceable Fixed Expenses
Selected data for Colony Company, which operates three departments,
follow:
Department A | Department B | Department C | ||
---|---|---|---|---|
Inventory | $70,000 | $252,000 | $98,000 | |
Equipment (average cost) | $630,000 | $378,000 | $252,000 | |
Payroll | $607,500 | $540,000 | $202,500 | |
Square feet of floor space | 27,000 | 13,500 | 4,500 |
During the year, the company's fixed expenses included the following:
Depreciation on equipment | $105,000 | |||
Real estate taxes | 31,500 | |||
Personal property taxes (on inventory and equipment) | 50,400 | |||
Personnel department expenses | 52,500 |
Assume that the property tax rate is the same for both inventory and equipment. Using the most causally related bases, prepare a schedule assigning the fixed expenses to the three departments. Hint: Not all fixed expenses are traceable to the three departments. One of these fixed costs should be considered a common cost and not traceable to the departments.
Do not round until your final answer. Round final answer to the nearest whole number.
Department A | Department B | Department C | ||
---|---|---|---|---|
Depreciation | Answer | Answer | Answer | |
Real estate taxes | Answer | Answer | Answer | |
Personal property taxes | Answer | Answer | Answer | |
Personnel dept. expenses | Answer | Answer | Answer |
Department A | Department B | Department C | |
Depreciation (on the basis of equipment) | $ 52,500.00 | $ 31,500.00 | $ 21,000.00 |
Real estate taxes (on th basis of square feet of floor) | $ 18,900.00 | $ 9,450.00 | $ 3,150.00 |
Personal property taxes (on the basis of inventory and equipment (average cost)) | $ 21,000.00 | $ 18,900.00 | $ 10,500.00 |
Personnel dept. expenses | $ - | $ - | $ - |