Woh Che Co. has four departments: materials, personnel, manufacturing, and packa

Question

Woh Che 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 ExpenseCost Allocation Base Utilities Insurance S 83,600 61,000 28,000 Number of employees Square feet occupied Value of assets in use Total $172,600 Departmental data for the company's recent reporting period follow. Department EmployeesSquare Feet Asset Values Materials Personnel Manufacturing Packaging 5,250 68,250 10,500 21,000 17,750 2,130 36,210 14,910 Total 110 105,000 71,000 1. Use this information to allocate each of the three indirect expenses across the four departments. Supervision expenses Allocation Base Percent of Allocation Base x Indirect Cost Allocated Cost Department Numerator Dnominator % of Total Materials Personnel Manufacturing Packaging Totals ilities Allocation Base ercent of Allocation Base x Indirect Cost Allocated Cost Department Numerator Denominator % of Total Materials Personnel Manufacturing Packaging Totals nsurance Allocation Base ercent of Allocation Bas x Indirect Cost Allocated Cost Department Numerator Dnominator % of Total Materials Personnel Manufacturing Packaging Totals

Explanation / Answer

Req 1 Supervision Expense Allocation Percent f Allocation * Indirect Cost Allocated Cost Base Numerator Denominator % of Total Department Material 22 22 110 20% 83600 16720 Personnel 11 11 110 10% 83600 8360 Manufacturing 44 44 110 40% 83600 33440 Packaging 33 33 110 0 83600 25080 Total 110 110 110 1 83600 Utilities Allocation Percent f Allocation * Indirect Cost Allocated Cost Base Numerator Denominator % of Total Department Material 21000 21000 105000 20% 61000 12200 Personnel 5250 5250 105000 5% 61000 3050 Manufacturing 68250 68250 105000 65% 61000 39650 Packaging 10500 10500 105000 10% 61000 6100 Total 105000 105000 105000 100% 61000 Insurance Allocation Percent f Allocation * Indirect Cost Allocated Cost Base Numerator Denominator % of Total Department Material 17750 17750 71000 25% 28000 7000 Personnel 2130 2130 71000 3% 28000 840 Manufacturing 36210 36210 71000 51% 28000 14280 Packaging 14910 14910 71000 21% 28000 5880 Total 71000 71000 71000 100% 28000 Statement showing indirect cost assigned: Supervision Utilities Insurance Total Material 16720 12200 7000 35920 Personnel 8360 3050 840 12250 Manufacturing 33440 39650 14280 87370 Packaging 25080 6100 5880 37060

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