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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

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.

Department Direct Expenses Square Feet Sales
Advertising $ 16,000 1,800
Administrative 35,000 750
Shoes 128,000 4,500 $ 204,000
Clothing 10,000 7,950 136,000

The advertising department developed and distributed 130 advertisements during the year. Of these, 26 promoted shoes and 104 promoted clothing. Utilities expense of $79,000 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 $79,000 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.

Utilities Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost
Department Numerator Denominator % of Total
Advertising
Administrative
Shoes
Clothing
Totals
Advertising Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost
Department Numerator Denominator % of Total
Shoes
Clothing
Totals
Administrative Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost
Department Numerator Denominator % of Total
Shoes
Clothing
Totals
MARATHON RUNNING SHOP
Departmental Expense Allocation Spreadsheet
For Year Ended December 31, 2019
Expense Totals Advertising Administrative Shoes Clothing
Direct expense
Indirect utilities expenses
Total dept. exp.
Service Dept. Expenses
Advertising Dept.
Administrative Dept.
Total expenses allocated

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