Question
Renton Company has two operating (production) departments supported by a number of service departments. Machining Department Assembly Department Sales 724,404 $356,796 Cost of goods sold
Renton Company has two operating (production) departments supported by a number of service departments.
Machining Department Assembly Department Sales 724,404 $356,796 Cost of goods sold 327,600 121,200 Direct expenses: Salaries 122,400 85,700 Insurance 20,200 11,000 Utilities 23,900 13,900 Depreciation 20,700 11,500 Maintenance 7,000 4,700
The company has also incurred the following indirect costs.
Salaries $36,700 Insurance 5,500 Utilities 2,000 Depreciation 13,800 Maintenance 29,400 Office expenses 71,100
Indirect costs are allocated as follows:
- salaries on the basis of sales,
- office expenses on the basis of the number of employees,
- insurance, utilities, depreciation, and maintenance on the basis of square footage.
Additional information about the departments follows:
Department Square Footage Number of employees Machining 14,535 78 Assembly 4,845 52
What is the indirect expense for Salaries to the Machining Dept.?
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