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re https://newconnect.mheducation.com/flow/connect.html er 22 Help Save & Exit Submit Check my work Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017 Direct Expenses Square Feet Sales Advertising Administrative Shoes Clothing 18,000 31,000 87,000 18,000 1,200 1,200 5,160$119,600 4,440 ok 140,400 The advertising department developed and distributed 160 advertisements during the year. Of these. 16 promoted shoes and 144 promoted clothing. Utilities expense of $50,000 is an indirect expense to all departments nces Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign () 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. Cost to be Allocated Cost ities Allocation Base Allocat Numerator De e of Total Administrative Shoes Clothing Totals

Explanation / Answer

Utilities Allocation base Num. Denom. % Total Cost to Be allocated Allocated cost Advertisement Sq. ft 1200 12000 10.00% 50000 5000 Admin Sq. ft 1200 12000 10.00% 50000 5000 Shoes Sq. ft 5160 12000 43.00% 50000 21500 Clothing Sq. ft 4440 12000 37.00% 50000 18500 12000 12000 100.00% 50000 50000 Advertisement: Allocation base Num. Denom. % Total Cost to Be allocated Allocated cost Shoes Advertisement 16 160 10.00% 23000 2300 Clothing Advertisement 144 160 90.00% 23000 20700 160 160 100.00% 23000 23000 Admin Allocation base Num. Denom. % Total Cost to Be allocated Allocated cost Shoes Sales 119600 260000 46.00% 36000 16560 Clothing Sales 140400 260000 54.00% 36000 19440 260000 260000 100.00% 36000 36000 DEPARTMENTAL EXPENSE ALLOCATIION SHEET Expense Total Advertisement Admin Shoes Clothing Direct expense 154000 18000 31000 87000 18000 utilities 50000 5,000 5000 21500 18500 Total dept expense 204000 23000 36000 108500 36500 Service deptt exp: Advertisement 0 -23000 2300 20700 Admin 0 -36000 16560 19440 Total expense allocated 204000 0 0 127360 76640

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