Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 $ 19,000 650 Administrative 22,000 1.170 Shoes 118,000 4,550 $222,000 Clothing 14,000 6,630 148.000 The advertising department developed and distributed 120 advertisements during the year. Of these, 36 promoted shoes and 84 promoted clothing. Utilities expense of $76,000 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 $76,000 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 Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost Numerator Denominator % of Total Department Advertising Administrative Shoes Clothing Totals Advertising Department Shoes Clothing Totals Allocation Base Percent of Allocation. Base Numerator Denominator % of Total Cost to be Allocated Allocated Cost Allocation Base Percent of Allocation Base Numerator Denomirlitor % of Total Cost to be Allocated Allocated Cost Administrative Department 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
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