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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 | $ | 83,600 | Number of employees |
Utilities | 61,000 | Square feet occupied | |
Insurance | 28,000 | Value of assets in use | |
Total | $ | 172,600 | |
Departmental data for the companys recent reporting period follow.
Department | Employees | Square Feet | Asset Values | |||||||||
Materials | 22 | 21,000 | $ | 17,750 | ||||||||
Personnel | 11 | 5,250 | 2,130 | |||||||||
Manufacturing | 44 | 68,250 | 36,210 | |||||||||
Packaging | 33 | 10,500 | 14,910 | |||||||||
Total | 110 | 105,000 | $ | 71,000 | ||||||||
1. Use this information to allocate each of the three indirect expenses across the four departments. 2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.
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