ACCT 2302 Managerial Accounting Chapter 22 Ex 22-1

Won 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 Expense CostAllocation Base
  Supervision$80,000   Number of employees
  Utilities 64,000   Square feet occupied
  Insurance 16,800   Value of assets in use




Departmental data for the company’s recent reporting period follow.


DepartmentEmployeesSquare FeetAsset Values
  Materials 18  27,000 $33,000 
  Personnel 4  4,800  1,400 
  Manufacturing 64  40,000  38,300 
  Packaging 29  13,000  15,100 

  Total 115  84,800 $87,800 






Use this information to allocate each of the three indirect expenses across the four departments.



Prepare a summary table that reports the indirect expenses assigned to each of the four departments.


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