Ready Company has two operating (production) departments: Assembly and Painting.

Question

Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 150 employees and occupies 43,000 square feet; Painting has 150 employees and occupies 29,000 square feet. Indirect factory expenses for the current period are as follows: Administration $79,000 Maintenance $99,000 Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is (Do not round your intermediate calculations and round your final answer to the nearest whole dollar amount): $39,500. $98,625. $99,625. $109,000. $59,125

Explanation / Answer

The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is

Administration $79,000 =79,000/300*150=$39,500

Maintenance $99,000=99,000/72,000*43,000=$59.125

Total= $ $98,625

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