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Exercise 22-5 (Algo) Departmental expense allocations LO P2 Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Employees Square Feet Asset
Exercise 22-5 (Algo) Departmental expense allocations LO P2 Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Department Employees Square Feet Asset Values Materials 36 52,500 $ 11,700 Personnel 9 17,500 3,900 Manufacturing Packaging 72 78,750 47,580 Total 63 180 26,250 14,820 175,000 $ 78,000 The four departments share the following Indirect expenses for supervision, utilities, and Insurance according to their allocation bases. Indirect Expense Supervision Utilities Insurance Total Cost $ 84,300 Number of employees Allocation Base 68,000 Square feet occupied 31,500 Asset values $ 183,800 Allocate each of the three Indirect expenses to the four departments. Supervision expenses Department Allocation Base Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Materials Personnel Manufacturing Packaging Totals Utilities Allocation Base Department Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Materials Personnel Manufacturing Packaging Totals Insurance Department Materials Personnel Manufacturing Packaging Totals Allocation Base Percent of Allocation Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Required information Use the following Information for the Quick Study below. (Algo) [The following Information applies to the questions displayed below.] The following Information is provided for each Investment Center. Investment Center Incone Average Assets Cameras Phones Computers $ 6,100,000 2,445,000 950,000 $ 25,700,000 16,300,000 15,000,000 QS 22-13 (Algo) Computing residual Income LO A1 Assume a target Income of 15% of average assets. Compute residual Income for each center. (Enter losses with a minus sign.) Target Income Cameras Phones Computers Targeted return % % Target income Residual Income Cameras Phones Computers Residual income (loss)
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