The following is a partially completed lower section of a departmental expense a
ID: 2493746 • Letter: T
Question
The following is a partially completed lower section of a departmental expense allocation spreadsheet for Stoneham. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Purchasing department expense to be allocated to Fabrication.
$31,500.
$15,200.
$8,800.
$10,500.
$23,100.
The following is a partially completed lower section of a departmental expense allocation spreadsheet for Stoneham. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Purchasing department expense to be allocated to Fabrication.
Explanation / Answer
Answer:
Purchasing department expense to be allocated to Fabrication = Total Cost of purchasing department * number of purchase order in fabrication / Total numbers of purchase orders in all operating departments
= $42,000 *15/20 = $31,500.
$31,500 is correct answer.
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