Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 9-6 (Algo) Departmental expense allocations LO P2 Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following
Exercise 9-6 (Algo) Departmental expense allocations LO P2 Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. Department Personnel office Shoes Clothing Sales Direct Expenses $12,000 31,000 85,000 Square Feet 600 420 16,000 2,340 2,640 $ 135,200 124,800 The company also has $50,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 14 employees and the Clothing department has 126 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments 3. Allocate office expense to the Shoes and Clothing departments. 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments, 3. Allocate office expense to the Shoes and Clothing departments. Utilities Department Personnel Allocation Base Numerator Denominator Percent of Allocation Base % of Total Cost to be Allocated Allocated Cost Office Shoes Clothing Totals Personnel expense Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Numerator Denominator % of Total Shoes- Clothing Totals Office expense Allocation Base Department Numerator Denominator Percent of Allocation Base % of Total Cost to be Allocated Allocated Cost Shoes Clothing Totals k ant Exercise 9-8 (Algo) Departmental income statement and contribution to overhead LO P3 The Ski department reports sales of $625,000 and cost of goods sold of $437,500. Its expenses follow. Direct expenses Indirect expenses Service department expenses Salaries Depreciation $ 119,000 48,400 Rent $ 16,800 Office $ 20,600 1. For the Ski department only, prepare a departmental income statement. 2. & 3. For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski department be eliminated? Complete this question by entering your answers in the tabs below. ences Req 1 Req 2 and 3 For the Ski department only, prepare a departmental income statement. Departmental Income Statement For Year Ended December 31 Expenses Total expenses Ski Department Req 2 and 3> Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 For the Ski department only, prepare a departmental contribution to overhead report. Based on these two reports, should the Ski department be eliminated? Departmental Contribution to Overhead For Year Ended December 31 Total direct expenses Departmental contribution to overhead Should the Ski department be eliminated? Ski Department
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started