Question
Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts
Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.
Indirect Expense Cost Allocation Base Supervision $ 83,900 Number of employees Utilities 64,000 Square feet occupied Insurance 29,500 Value of assets in use Total $ 177,400
Departmental data for the company's recent reporting period follow.
Department Employees Square Feet Asset Values Materials 35 47,250 $ 14,800 Personnel 7 13,500 4,440 Manufacturing 63 60,750 37,000 Packaging 35 13,500 17,760 Total 140 135,000 $ 74,000
1. Use this information to allocate each of the three indirect expenses across the four departments.
2. Create a summary table that reports the indirect expenses assigned to each of the four departments.
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