Exercise 22-5 (Algo) Departmental expense allocations LO P2Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows.Employees Square Feet34176851170DepartmentMaterialsPersonnelManufacturingPackagingTotalThe four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases.Indirect ExpenseSupervisionUtilitiesInsuranceTotalSupervision expensesDepartmentMaterialsPersonnelAllocate each of the three indirect expenses to the four departments.ManufacturingPackagingTotalsUtilitiesDepartmentMaterialsPersonnel32,00016,00088,00024,000160,000ManufacturingPackagingTotalsAsset Values$ 13,2001,98034,98015,840$ 66,000CostAllocation Base$ 83,100 Number of employees56,000 Square feet occupied25,500 Asset values$ 164,600Allocation BaseAllocation BasePercent of Allocation BaseNumerator Denominator % of TotalPercent of Allocation BaseNumerator Denominator % of TotalCost to be Allocated Allocated CostCost to be Allocated Allocated Cost InsuranceDepartmentMaterialsPersonnelManufacturingPackagingTotalsAllocation BasePercent of Allocation BaseNumerator Denominator % of TotalCost to be Allocated Allocated Cost

Activity-based costing is used to distribute the overhead. Using ABC, overheads are allocated on the…

Exercise 22-5 (Algo) Departmental expense allocations LO P2 Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Employees Square Feet 34 17 Department Materials Personnel Manufacturing Packaging Total 68 51 170 Indirect Expense Supervision Utilities Insurance Total 32,000 16,000 88,000 24,000 160,000 Asset Values $ 13,200 1,980 34,980 15,840 $ 66,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases Cost Allocation Base $ 83,100 Number of employees 56,000 Square feet occupied 25,500 Asset values $ 164,600 Allocate each of the three indirect expenses to the four departments.

Exercise 22-5 (Algo) Departmental expense allocations LO P2 Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. Employees Square Feet 34 17 Department Materials Personnel Manufacturing Packaging Total 68 51 170 Indirect Expense Supervision Utilities Insurance Total 32,000 16,000 88,000 24,000 160,000 Asset Values $ 13,200 1,980 34,980 15,840 $ 66,000 The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases Cost Allocation Base $ 83,100 Number of employees 56,000 Square feet occupied 25,500 Asset values $ 164,600 Allocate each of the three indirect expenses to the four departments.

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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Activity Based Costing
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6
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Multiple Choice $787,500. $741,500. $833,500. $77,730.
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1m 2 A $ Budgeted overhead costs before any 3 interdepartment cost allocations Support work supplied by AS (budgeted head count) 4 Support work supplied by IS 5 (budgeted computer time) B AS SUPPORT 0 C 10% IS D 20% OPERATING GOVT 600,000 $1,200,000 $8,725,000 $ 12,540,000 $23,065,000 48% E 36% CORP 32% Total 54% 100% 100%
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