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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 of these indirect expenses and the bases used to allocate them follow. Indirect Expense CostAllocation BaseSupervision$82,500Number of employeesUtilities 50,000Square feet occupiedInsurance 22,500Value of assets in useTotal$155,000  Departmental data for the company’s recent reporting period follow. DepartmentEmployees Square Feet Asset ValuesMaterials 27   25,000   $6,000 Personnel 9   5,000    1,200 Manufacturing 63   55,000    37,800 Packaging 51   15,000    15,000 Total 150   100,000   $60,000   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.

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 of these indirect expenses and the bases used to allocate them follow.
 

Indirect Expense   Cost Allocation Base
Supervision $ 82,500 Number of employees
Utilities   50,000 Square feet occupied
Insurance   22,500 Value of assets in use
Total $ 155,000  
 


Departmental data for the company’s recent reporting period follow.
 

Department Employees   Square Feet   Asset Values
Materials   27       25,000       $ 6,000  
Personnel   9       5,000         1,200  
Manufacturing   63       55,000         37,800  
Packaging   51       15,000         15,000  
Total   150       100,000       $ 60,000  
 

 
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.
 

 
check_circleAnswer
Step 1

Based on the given information allocate the indirect expenses to each of the department.

Allocation of supervision expenses:

 

 

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Step 2

Allocation of Utilities expense:

 

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Step 3

Allocation of Insurance expense:

...
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