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
  

 
  Total$160,800   
  



 

    

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 
   

  

 



 

   

(1)

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

 

(2)

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

  

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