Woh Che Co. has four departments: Materials, Personnel, Manufacturing, and Packaging. In a recent month,...
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Accounting
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
$
83,100
Number of employees
Utilities
56,000
Square feet occupied
Insurance
25,500
Value of assets in use
Total
$
164,600
Departmental data for the companys recent reporting period follow.
Department
Employees
Square Feet
Asset Values
Materials
34
32,000
$
13,200
Personnel
17
16,000
1,980
Manufacturing
68
88,000
34,980
Packaging
51
24,000
15,840
Total
170
160,000
$
66,000
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.
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