Exercise 9-5 Departmental expense allocations LO P2

Woh Che Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.

Indirect Expense		Cost	Allocation Base
Supervision	$	84,100	Number of employees
Utilities		66,000	Square feet occupied
Insurance		30,500	Value of assets in use
Total	$	180,600

Departmental data for the companys recent reporting period follow.

Department	Employees				Square Feet				Asset Values
Materials		40				31,000				$	7,600
Personnel		8				15,500					2,280
Manufacturing		64				77,500					50,160
Packaging		48				31,000					15,960
Total		160				155,000				$	76,000

1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.