Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017. Sales Department Advertising Administrative Shoes Clothing Direct Expenses $ 18,000 25,000 103,000 15,000 Square Feet 1,120 1,400 7,140 4,340 $273,000 77,000 The advertising department developed and distributed 120 advertisements during the year. Of these, 90 promoted shoes and 30 promoted clothing. Utilities expense of $64,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $64,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the amount of sales. Answer is not complete. Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Floor space Department Numerator Denominator occupied 1,120 % of Total 8.00 Advertising 1,120 14,000 $ 64,000 $ 5,120 Administrative 1,400 1,400 14,000 10.00 64,000 6,400 Shoes 7,140 7,140 14,000 51.00 64,000 Clothing 4,340 14,000 31.00 64,000 4,340 14,000 32,640 19,840 64,000 Totals 100.00 Advertising Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Number of ads > Numerator Denominator % of Total 75.00 Shoes 90 90 120 $ 32,120 X $ 32,120 17,340 5,780 Clothing 30 30 120 25.00 Totals 120 100.00 $ 32,120 Administrative Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Department Sales Numerator Denominator % of Total 78.00 Shoes $ 273,000 273,000 $ 350,000 $ 31,400 $ 24,492 77,000 350,000 31,400 6,908 Clothing Totals 22.00 100.00 $ 31,400 MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2017 Expense Totals Advertising Administrative Shoes $ $ 161,000 18,000 $ 25,000 103,000 Clothing 15,000 64,000 5,120 6,400 32,640 19,840 225,000 23,120 31,400 135,640 34,840 Direct expense Indirect utilities expenses Total dept. exp. Service Dept. Expenses Advertising Dept. Administrative Dept. Total expenses allocated (23,120) 17,340 5,780 6,908 (31,400) 24,492 $ 225,000 $ 0 $ 0 47,528 177,472