Karen 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 Supervision Utilities Cost $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Allocation Base Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet Asset Values 58 66,500 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 9,500 95,000 19,000 70 64 Total 200 190,000 $69,000 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.
Karen 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 Supervision Utilities Cost $ 82,000 Number of employees 59,000 Square feet occupied 27,000 Value of assets in use Allocation Base Insurance Total $168,000 Departmental data for the company's recent reporting period follow. Department Materials Employees Square Feet Asset Values 58 66,500 $10,350 4,140 38,640 15,870 Personnel 8 Manufacturing Packaging 9,500 95,000 19,000 70 64 Total 200 190,000 $69,000 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.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 7E: Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments,...
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