Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 22-6 Departmental expense allocation spreadsheet LO P2 Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing).

Exercise 22-6 Departmental expense allocation spreadsheet LO P2

Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017.

Department Direct Expenses Square Feet Sales
Advertising $ 19,000 1,350
Administrative 22,000 1,350
Shoes 93,000 4,800 $ 204,800
Clothing 12,000 7,500 115,200

The advertising department developed and distributed 230 advertisements during the year. Of these, 69 promoted shoes and 161 promoted clothing. Utilities expense of $45,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $45,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising departments expenses to the two operating departments on the basis of the number of ads placed that promoted a departments products, and (4) the administrative departments expenses to the two operating departments based on the amount of sales.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Stock Market Trading For Beginners

Authors: Irvin Tarr

1st Edition

1491885327, 978-1491885321

More Books

Students also viewed these Finance questions