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Problem 2 2 - 2 B Allocation of indirect expenses to departments P 2 Harmon's has two operating departments, Clothing and Shoes. Indirect expenses for
Problem B Allocation of indirect expenses to departments P
Harmon's has two operating departments, Clothing and Shoes. Indirect expenses for the period
follow.
The company occupies oo square feet of a rented building. In prior periods, the company divided
the $ of indirect expenses by square feet to find an average cost of $ per square foot,
and then allocated indirect expenses to each department based on the square feet it occupied.
The company now wants to allocate indirect expenses using the allocation bases shown below.
Required
Allocate indirect expenses to the two departments using the allocation method used in prior
periods.
Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet
occupied. Advertising expense is allocated based on total sales. Insurance expense is allocated based
on the value of insured assets.
Help please, I am really confused.
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