Assigning Traceable Fixed Expenses Selected data for Colony Company, which operates three departments, follow:

Department A Department B Department C

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,000 $144,000 $ 56,000

Equipment (average cost) . . . . . . . . . . . . . . . . . . $360,000 $216,000 $144,000

Payroll. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $607,500 $540,000 $202,500

Square feet of floor space . . . . . . . . . . . . . . . . . . 27,000 13,500 4,500

During the year, the companys fixed expenses included the following:

Depreciation on equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000

Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,500

Personal property taxes (on inventory and equipment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,400

Personnel department expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337,500

Assume that the property tax rate is the same for both inventory and equipment. Using the most caus- ally 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.