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National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. $ 45,000 25,000 Rent Advertising 10,000 $ 80,000 Insurance Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 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. Value of Insured Square Feet 1,560 2,440 Assets $ 56,000 44,000 Sales Department Housewares $ 340,000 160,000 Sporting 000 S 500 000 S 100 000 Mete1

National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. $ 45,000 25,000 Rent Advertising 10,000 $ 80,000 Insurance Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 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. Value of Insured Square Feet 1,560 2,440 Assets $ 56,000 44,000 Sales Department Housewares $ 340,000 160,000 Sporting 000 S 500 000 S 100 000 Mete1

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. $ 45,000 25,000 Rent Advertising Insurance 10,000 $ 80,000 Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 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. Value of Insured Square Feet 1,560 Sales $ 340,000 160,000 $ 500,000 Department Housewares Assets $ 56,000 44,000 $ 100,000 Sporting 2,440 Total 4,000 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods. Department Square Feet Rate Total Housewares Sporting $ %24
Transcribed Image Text:National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. $ 45,000 25,000 Rent Advertising Insurance 10,000 $ 80,000 Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 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. Value of Insured Square Feet 1,560 Sales $ 340,000 160,000 $ 500,000 Department Housewares Assets $ 56,000 44,000 $ 100,000 Sporting 2,440 Total 4,000 Required: 1. Allocate indirect expenses to the two departments using the allocation method used in prior periods. Department Square Feet Rate Total Housewares Sporting $ %24
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