the following is a partially completed lower section of a departmental expense allocation spreadsheet for brickland. it reports the total amounts of direct and indirect expenses for the four departments. purchasing department expenses are allocated to the operating departments on the basis of purchase orders. maintenance department expenses are allocated based on square footage.
Compute the amount of Maintenance department expense to be allocated to Assembly. (Do not round your intermediate calculations.)
Purchasing Maintenance Fabrication Assembly
Operating costs $46,000 $26,400 $110,000 $76,000
No. of purchase orders 14 6
Sq.ft. of space 4,000 2,000
$17,600.
$8,800.
$13,200.
$13,800.
$32,200.

Respuesta :

Option b. $8,800 is the correct answer. The maintenance expense to be allocated to Assembly is $8800 as per the given budget and allocations

Service Costs are costs incurred by the service departments in assisting the production departments inside the company. Therefore, the service department cost is allocated to the production departments.

Maintenance Department Expense of Assembly = Maintenance Department Expense x (Square Footage of Assembly / Total Square Footage)

Maintenance Department Expense of Assembly = $26,400 x ( 2000 / 6,000)

Maintenance Department Expense of Assembly = $26,400 x 0.3333

Maintenance Department Expense of Assembly = $8799 or $8800

Hence the maintenance department expense of assembly is $8800

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