Diaz Company is a retail store with two operating departments, Clothes and Shoes. Information follows. For Year Ended December 31 Sales Cost of goods sold Direct expenses: Wages Supplies used Clothes $ 800,000 Shoes $ 450,000 497,000 291,000 125,000 88,000 20,000 10,000 28,000 17,000 Depreciation The company reports the following indirect expenses for the year. Indirect Expense Utilities Supervisor salaries Amount $ 6,000 50,000 Allocation Base Square feet of space occupied Number of employees in department Additional information about the two departments follows. Department Clothes Shoes Required: Square Footage 28,000 12,000 Number of Employees 75 50 1. Allocate indirect expenses to the two operating departments. 2. Prepare departmental income statements.