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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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