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 Expense Cost Allocation Base
Supervision $84,300 Number of employees
Utilities 68,000 Square feet occupied
Insurance 31,500 Value of assets in use
Total 183,800
Departmental data for the company's recent reporting period follow.
Department Employees Square Feet Asset Values
Materials 36 52,500 $11,700
Personnel 9 17,500 3,900
Manufacturing 72 78,750 47,580
Packaging 63 26,250 14,820
Total 180 175,000 $78,000
(1) Use this information to allocate each of the three indirect expenses across the four departments.
Answers: 1
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