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Ford Motor Company has indirect costs of $30,000,000, which need to be allocated to two departments, Manufacturing and Sales. Department Manufacturing occupies 60% of the

Ford Motor Company has indirect costs of $30,000,000, which need to be allocated to two departments, Manufacturing and Sales. Department Manufacturing occupies 60% of the total space, and department Sales occupies 40%. Allocate indirect costs based on the square footage occupied by each department.

Department

Percentage of Space Occupied

Indirect Cost Allocation

Manufacturing

60%


Sales

40%


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