Bridgestreet, Inc. has three operating departments: Cutting, Assembling, and Fin

Question

Bridgestreet, Inc. has three operating departments: Cutting, Assembling, and Finishing. Cutting has 5,000 employees and occupies 15,000 square feet. Assembling has 4,000 employees and occupies 12,000 square feet. Finishing has 1,000 employees and occupies 23,000 square feet. Indirect factory costs for the current period were Administrative $170,000 and Maintenance $212,000. Administrative costs are allocated to operating departments based on the number of workers and maintenance costs are allocated to operating departments based on square footage occupied.

Based on the preceding data, determine the administrative cost allocated to each operating department of Bridgestreet, Inc.

Explanation / Answer

Total square feet: 15,000 + 12,000 + 23,000 = 50,000 square feet
Cutting: 15,000 square feet/50,000 square feet x $212,000 = $63,600
Assembling: 12,000 square feet/50,000 square feet x $212,000 = $50,880
Finishing: 23,000 square feet/50,000 square feet x $212,000 = $97,520

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