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 2019 Sales Department Advertising Administrative Shoes Clothing Direct Expenses $ 19,000 34,000 112,000 17,000 Square Feet 850 1,53e 5,780 8,840 $121,800 168,200 The advertising department developed and distributed 200 advertisements during the year of these, 20 promoted shoes and 180 promoted clothing. Utilities expense of $50,000 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 $50,000 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 Allocation Base Percent of Allocation Base Cost to be Allocated located Cost Numerator Denominator 850 17,000 5 2,500 Department Advertising Administrative Shoes Clothing 1530 17,000 Floor space occupied 850 1530 5.780 8,840 17 000 4.500 % of Total 5.00 9.00 34.00 52.00 100.00 $ 50,000 50,000 50.000 50.000 5.780 8.840 17.000 17,000 17.000 26.000 50.000 Tots Advertising Cost to be Allocated Allocated Cost Department Shoes Allocation Base Percent of Allocation Base Number of ads Numerator Denominator % of Total 200 201 200 10.00 180 180 200 90.00 100.00 $ 180 Clothing 180 Totals 200 Administrative Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Cost to be Allocated Allocated Cost Utilities Allocation Base cent of Allocation Base $ Department Advertising Administrative 2,500 4,500 17.000 26,000 50,000 Shoes Clothing Totals Allocated Cost Advertising Department Shoes Clothing Totals Numerator Floor space occupied % of Total Denominator 850 850 17,000 5.00 $ 50,000 1,530 1,530 17,000 9.00 50,000 5,780 5,780 17,000 34.00 50.000 8,840 8,840 17,000 52.00 50,000 17,000 100.00 Cost to be Allocation Base Percent of Allocation Base Allocated Number of ads Numerator Denominator % of Total 201 20 200 10.00 $ 180 180 180 200 S 90.00 180 200 100.00 Cost to be Allocation Base Percent of Allocation Base Allocated Sales Numerator Denominator % of Total $ 121,800 $ 121,800 $ 290,000 42.00 168 2007 168,200 290,000 58.00 100.00 MARATHON RUNNING SHOP Departmental Expense Allocation Spreadsheet For Year Ended December 31, 2019 Expense Totals Advertising Administrative Shoes Clothing 180 Allocated Cost Administrative Department Shoes Clothing Totals Direct expense Indirect utilities expenses Total dept. exp. Service Dept. Expenses Advertising Dept Administrative Dept. Total expenses allocated
