General Office Purchasing Hardware Software Repalrs Sales. $960,000 $600,000 $840,000 Cost of goods sold Direct expenses Рayroll Depreclation Supplies 500,000 300,000 200,000 $60,000 6,000 $45,000 25,000 4,200 325,000 7,200 10,000 80,000 33,000 10,000 9,600 15,000 2,000 25,000 The departments incur several indirectex penses. To prepare departmental income statements, the indirect expenses must be allocated across the five departments. Then the expenses of the two service departments must be allocated to the three operating departments. Total cost amounts and the allocation bases for each inflirect expense follow. Indirect Expense Total Cost Allocation Basis $150,000 Square footage occupled Square footage occupled Rent.. Utilities 50,000 Advertising 125,000 30,000 Dollars of sales Insurance Value of assets Insured Service departments General office.. Purchasing. Number of employees Dollars of cost of goods sold The following additional information is needed for indirect expense allocations. Square Insured Cost of Department Feet Sales Assets Employees Goods Sold $ 60,000 General office. 500 Purchasing Hardware 500 72,000 330,000 42,000 96,000 $ 500,000 4,000 3,000 $ 960,000 600,000 840,000 5 Software. 5 Repalrs Totals. 2,000 10,000 300,000 200,000 $1.000,000 10 $2.400.000 $600,000 Required 1. Prepare a departmental expense allocation spreadsheet for Gamer's Haven. 2. Prepare a departmental income statement reporting net income for each operating department and for all operating departments combined.
General Office Purchasing Hardware Software Repalrs Sales. $960,000 $600,000 $840,000 Cost of goods sold Direct expenses Рayroll Depreclation Supplies 500,000 300,000 200,000 $60,000 6,000 $45,000 25,000 4,200 325,000 7,200 10,000 80,000 33,000 10,000 9,600 15,000 2,000 25,000 The departments incur several indirectex penses. To prepare departmental income statements, the indirect expenses must be allocated across the five departments. Then the expenses of the two service departments must be allocated to the three operating departments. Total cost amounts and the allocation bases for each inflirect expense follow. Indirect Expense Total Cost Allocation Basis $150,000 Square footage occupled Square footage occupled Rent.. Utilities 50,000 Advertising 125,000 30,000 Dollars of sales Insurance Value of assets Insured Service departments General office.. Purchasing. Number of employees Dollars of cost of goods sold The following additional information is needed for indirect expense allocations. Square Insured Cost of Department Feet Sales Assets Employees Goods Sold $ 60,000 General office. 500 Purchasing Hardware 500 72,000 330,000 42,000 96,000 $ 500,000 4,000 3,000 $ 960,000 600,000 840,000 5 Software. 5 Repalrs Totals. 2,000 10,000 300,000 200,000 $1.000,000 10 $2.400.000 $600,000 Required 1. Prepare a departmental expense allocation spreadsheet for Gamer's Haven. 2. Prepare a departmental income statement reporting net income for each operating department and for all operating departments combined.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Management requests departmental income statements for Gamer’s Haven, a computer store that has five departments. Three are operating departments (Hardware, Software, and Repairs) and two are service departments (general office and purchasing).
Transcribed Image Text:General Office
Purchasing
Hardware
Software
Repalrs
Sales.
$960,000
$600,000
$840,000
Cost of goods sold
Direct expenses
Рayroll
Depreclation
Supplies
500,000
300,000
200,000
$60,000
6,000
$45,000
25,000
4,200
325,000
7,200
10,000
80,000
33,000
10,000
9,600
15,000
2,000
25,000
The departments incur several indirectex penses. To prepare departmental income statements, the indirect
expenses must be allocated across the five departments. Then the expenses of the two service departments
must be allocated to the three operating departments. Total cost amounts and the allocation bases for each
inflirect expense follow.
Indirect Expense
Total Cost
Allocation Basis
$150,000
Square footage occupled
Square footage occupled
Rent..
Utilities
50,000
Advertising
125,000
30,000
Dollars of sales
Insurance
Value of assets Insured
Service departments
General office..
Purchasing.
Number of employees
Dollars of cost of goods sold
The following additional information is needed for indirect expense allocations.
Square
Insured
Cost of
Department
Feet
Sales
Assets
Employees
Goods Sold
$ 60,000
General office.
500
Purchasing
Hardware
500
72,000
330,000
42,000
96,000
$ 500,000
4,000
3,000
$ 960,000
600,000
840,000
5
Software.
5
Repalrs
Totals.
2,000
10,000
300,000
200,000
$1.000,000
10
$2.400.000
$600,000
Required
1. Prepare a departmental expense allocation spreadsheet for Gamer's Haven.
2. Prepare a departmental income statement reporting net income for each operating department and for
all operating departments combined.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education