Selected data for Miller Company, which operates three departments, follow: Department ADepartment BDepartment CInventory $64,000$230,400$89,600Equipment (average cost) $576,000$345,600$230,400Payroll $810,000$720,000$270,000Square feet of floor space 18,0009,0003,000 During the year, the company's fixed expenses included the following:Depreciation on equipment $64,000Real estate taxes 19,200Personal property taxes (on inventory and equipment) 30,720Personnel department expenses 40,000 Assume that the property tax rate is the same for both inventory and equipment. Using the most causally related bases, prepare a schedule assigning the fixed expenses to the three departments.Hint: Not all fixed expenses are traceable to the three departments. One of these fixed costs should be considered a common cost and not traceable to the departments. DepreciationReal estate taxesPersonal property taxesPersonnel dept. expensesDepartment$A Department B Department C00 $0000000000$

Fixed expenses are assigned to the departments using the activity level of the cost drivers.

Answered: $810,000 $720,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Selected data for Miller Company, which operates three departments, follow:

	Department A	Department B	Department C
Inventory	$64,000	$230,400	$89,600
Equipment (average cost)	$576,000	$345,600	$230,400
Payroll	$810,000	$720,000	$270,000
Square feet of floor space	18,000	9,000	3,000

During the year, the company's fixed expenses included the following:

Depreciation on equipment				$64,000
Real estate taxes				19,200
Personal property taxes (on inventory and equipment)				30,720
Personnel department expenses				40,000

Assume that the property tax rate is the same for both inventory and equipment. Using the most causally related bases, prepare a schedule assigning the fixed expenses to the three departments.

Hint: Not all fixed expenses are traceable to the three departments. One of these fixed costs should be considered a common cost and not traceable to the departments.

Depreciation
Real estate taxes
Personal property taxes
Personnel dept. expenses
Department
$
A Department B Department C
0
0 $
0
0
0
0
0
0
0
0
0
0
$

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