Exercise 22-5 Departmental expense allocations LO P2Woh 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. Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare a summary table that reports the indirect expenses assigned to each of the four departments.SupervisionUtilitiesInsuranceTotalMaterialsPersonnelManufacturingPackagingTotals0 $< Required 1Required 2 > Complete this question by entering your answers in the tabs below.Required 1Required 2Use this information to allocate each of the three indirect expenses across the four departments.Supervision expensesDepartmentAllocation BasePercent of Allocation BaseCost to be AllocatedAllocated CostNumeratorDenominator% of TotalMaterialsPersonnelManufacturingPackagingTotalsUtilitiesAllocation BasePercent of Allocation BaseCost to be AllocatedAllocated CostDepartmentNumeratorDenominator% of TotalMaterialsPersonnelManufacturingPackagingTotalsInsuranceAllocation BasePercent of Allocation BaseCost to be AllocatedAllocated CostDepartmentNumeratorDenominator% of TotalMaterialsPersonnelManufacturingPackagingTotalsRequired 1Required 2 >

Cost Allocation: The distribution of a single cost among several companies, business units, or cost…

Answered: Woh Che Co. has four departments:…

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter6: Financial Statements And The Closing Process

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Problem 1SEB: INCOME STATEMENT From the partial work sheet for Major Advising below, prepare an income statement....

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Exercise 22-5 Departmental expense allocations LO P2

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.