00.00 Sprint 10:16 PM 17% D ezto.mheducation.com Managerial Accounting 212: Sect
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Question
00.00 Sprint 10:16 PM 17% D ezto.mheducation.com Managerial Accounting 212: Section 212 ACCOUNTING 22 Homework Question 1 (of 7) 10.00 points Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). During 2015, the departments had the following direct expenses and occupied the following amount of floor space Direct Expenses Square Feet Department Advertising Shoes $ 12,000 31,000 85,000 16,000 600 420 2.340 2.640 Shoes Clothing The advertising department developed and distributed 140 advertisements during the year. Of these, 14 promoted shoes and 126 promoted clothing. The store sold $260,000 of merchandise during the year. Of this amount, $135,200 is from the shoes department, and $124,800 is from the clothing department. The utilities expense of $50,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $50,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the amount of sales. Utilities Allocation Base Percent of Allocation BaseExplanation / Answer
Answer:
Utilities Allocation base Percent of allocation base Cost to be allocated Allocated cost Department Floor space occupied Numerator Denominator % of total Advertising 600 600 6000 10.00% 50000 5000 Administrative 420 420 6000 7.00% 50000 3500 Shoes 2340 2340 6000 39.00% 50000 19500 Clothing 2640 2640 6000 44.00% 50000 22000 Totals 6000 100.00% 50000Related Questions
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