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
|
$84,000
|
Number of employees
|
|
Utilities
|
65,000
|
Square feet occupied
|
|
Insurance
|
30,000
|
Value of assets in use
|
|
Total
|
$179,000
|
|
Departmental data for the company's recent reporting period follow.
|
Department
|
Employees
|
Square Feet
|
Asset Value
|
|
Materials
|
27
|
58,000
|
$7,500
|
|
Personnel
|
9
|
7,250
|
1,500
|
|
Manufacturing
|
60
|
65,250
|
48,750
|
|
Packing
|
54
|
14,500
|
17,250
|
|
Total
|
150
|
145,000
|
$75,000
|
Required -
1. Use this information to allocate each of three indirect expenses across the four departments.
2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.