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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
$84,000
Number of employees
Utilities
65,000
Square feet occupied
Insurance
30,000
Value of assets in use
Total
$179,000
Departmental data for the company's recent reporting period follow.
Department
Employees
Square Feet
Asset Value
Materials
27
58,000
$7,500
Personnel
9
7,250
1,500
Manufacturing
60
65,250
48,750
Packing
54
14,500
17,250
150
145,000
$75,000
Required -
1. Use this information to allocate each of 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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