Diaz Company is a retail store with two operating departments, Clothes and Shoes. Information follows. For Year Ended December 31 Clothes Shoes Sales $ 819,200 $ 460,800 Cost of goods sold 475,000 299,520 Direct expenses: Wages 124,000 83,000 Supplies used 12,000 10,400 Depreciation 16,000 13,000 The company reports the following indirect expenses for the year. Indirect Expense Amount Allocation Base Utilities $ 6,800 Square feet of space occupied Supervisor salaries 27,000 Number of employees in department Additional information about the two departments follows. Department Square Footage Number of Employees Clothes 29,400 60 Shoes 19,600 40 Required: 1. Allocate indirect expenses to the two operating departments. 2. Prepare departmental income statements.