Question
Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). During 2015, the departments had the following direct
Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). During 2015, the departments had the following direct expenses and occupied the following amount of floor space. |
Department | Direct Expenses | Square Feet | ||||
Advertising | $ | 16,000 | 900 | |||
Administrative | 29,000 | 500 | ||||
Shoes | 110,000 | 3,400 | ||||
Clothing | 14,000 | 5,200 | ||||
The advertising department developed and distributed 120 advertisements during the year. Of these, 12 promoted shoes and 108 promoted clothing. The store sold $240,000 of merchandise during the year. Of this amount, $139,200 is from the shoes department, and $100,800 is from the clothing department. The utilities expense of $71,000 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 $71,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising departments expenses to the two operating departments on the basis of the number of ads placed that promoted a departments products, and (4) the administrative departments expenses to the two operating departments based on the amount of sales. |
2. value: 4.00 points Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). During 2015, the departments had the following direct expenses and occupied the following amount of floor space. Square Feet 900 Department Advertising Administrative Shoes Clothing Direct Expenses $ 16,000 29,000 110.000 14,000 500 3.400 5,200 The advertising department developed and distributed 120 advertisements during the year. Of these, 12 promoted shoes and 108 promoted clothing. The store sold $240,000 of merchandise during the year. Of this amount, $139,200 is from the shoes department, and $100,800 is from the clothing department. The utilities expense of $71,000 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 $71,000 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. Utilities Percent of Allocation Base Cost to be Allocated Allocated Cost Allocation Base Floor space occupied Department 1 Numerator nu Denominator % of Total Advertising Shoes Clothing Totals Advertising Department Allocation Cost to be Allocated Percent of Allocation Base Base Allocated Cost Number of ads Numerator Denominator % of Total Clothing 0 Administrative Allocation Base Sales Cost to be Allocated Percent of Allocation Base Allocated Cost Numerator Denominator % of Total Department Shoes Clothing Totals MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2015 Expense Advertising Administrative Shoes Totals Clothing 0 01 ololol Direct expense Indirect utilities expenses Total dept. exp. Service Dept. Expenses Advertising Dept. Administrative Dept. Total expenses allocated 0 $ $ $ $ 0
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