Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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 Direct Expenses Square Feet Sales Personnel $ 20,000 2,420 Office 22,000 1,100 Shoes 133,000 8,580 $ 118,800 Clothing 12,000 9,900 151,200 The company also has $79,000 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 18 employees and the Clothing department has 162 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. Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator % of Total Utilities Department Personnel Office Shoes Clothing Totals Personnel expense Department Shoes Clothing Totals Allocation Base Cost to be Allocated Allocated Cost Percent of Allocation Base Numerator Denominator % of Total Office expense Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total Department Shoes Clothing Totals
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