Won Han Co. has four departments: materials, personnel, manufacturing, and packa

Question

Won Han 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 ExpenseCostAllocation Base Supervision Utilities Insurance S 71,000 Number of employees 56,000 Square feet occupied 16,900 Value of assets in use 143,900 Total Departmental data for the company's recent reporting period follow Department Employees Square Feet Asset Values Materials Personnel Manufacturing Packaging 28,000 32,000 1,300 37,500 14,900 18 4,500 45,000 13,100 67 Total 126 90,600 $85,700

Explanation / Answer

Ans. 1 Supervision Expenses: Department Number of Percentage of Indirect Allocated (a) employees (d) employees in total © Cost (d) Cost (c*d) Materials 18 18/126*100 = 14.29% 71000 10142.86 Personnel 8 8/126*100    = 6.35% 71000 4507.94 Manufacturing 67 67/126*100 = 53.17% 71000 37753.97 Packaging 33 33/126*100 = 26.19% 71000 18595.24 126 71000 2 Utilities: Department Square Percentage of Indirect Allocated (a) feet (d) Square feet in total © Cost (d) Cost (c*d) Materials 28000 28000/90600*100   = 30.9% 56000 17304 Personnel 4500 4500/90600*100    = 4.97% 56000 2783 Manufacturing 45000 45000/90600*100 = 49.67% 56000 27815 Packaging 13100 13100/90600*100 = 14.46% 56000 8098 90600 56000 3 Insurance: Department Square Percentage of Indirect Allocated (a) feet (d) Square feet in total © Cost (d) Cost (c*d) Materials 32000 32000/85700*100 = 37.34% 16900 6310.39 Personnel 1300 1300/85700*100    = 1.52% 16900 256.36 Manufacturing 37500 37500/85700*10    = 43.76% 16900 7394.98 Packaging 14900 14900/85700*10    = 17.39% 16900 2938.27 85700 16900 Ans.2 Department Supervision Utilities Insurance Total Materials 10143 17304 6310.39 33757 Personnel 4508 2783 256.36 7547 Manufacturing 37754 27815 7394.98 72964 Packaging 18595 8098 2938.27 29632 71000 56000 16900 143900

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