Happy Company operates four departments — kitchen, bathroom, office and laundry. When preparing a departmental statement of financial performance, the store’s accountant allocates indirect expenses using the following allocation bases.

The kitchen department is located at the front of the store and the other departments are at the back. For the purposes of the allocation of the rent expense, it is assumed that the front of the store is twice as valuable as the back.
Required

(a) Prepare a schedule showing the allocation of the indirect expenses to the four departments.

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Indirect expense Rent Personnel Insurance Advertising Allocation base Relative value of floor space Number of employees Value of inventory Sales Total amount $380 000 160 000 190 000 340 000 The following data were obtained for the four departments. Sales Floor space (m) Number of employees Value of inventory Kitchen $ 724 400 Bathroom 297 $ 412 200 198 Office $ 568 300 Laundry $ 256 100 99 99 4 2 3 1 $ 174 000 $ 285 000 $ 137 000 $ 174 000