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Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. Department Personnel Office Shoes Clothing Direct Expenses Square Feet $ 18,000 25,000 103,000 15,000 1,120 1,400 7,140 4,340 Sales $ 273,000 77,000 The company also has $64,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 9 employees and the Clothing department has 3 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments. 3. Allocate office expense to the Shoes and Clothing departments.

Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. Department Personnel Office Shoes Clothing Direct Expenses Square Feet $ 18,000 25,000 103,000 15,000 1,120 1,400 7,140 4,340 Sales $ 273,000 77,000 The company also has $64,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 9 employees and the Clothing department has 3 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments. 3. Allocate office expense to the Shoes and Clothing departments.

FINANCIAL ACCOUNTING
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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Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. Department Personnel Office Shoes Clothing Utilities Department Personnel. Office Shoes Clothing Direct Expenses Square Feet $ 18,000 25,000 103,000 15,000 The company also has $64,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 9 employees and the Clothing department has 3 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. Totals Personnel expense Department i Shoes Clothing 1,120 1,400 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments. 3. Allocate office expense to the Shoes and Clothing departments. Totals Office evnene 7,140 4,340 Allocation Base Sales Allocation Base $ 273,000 77,000 Alineatinn Rake 1,120 1,400 7,140 4,340 14,000 Percent of Allocation Base Denominator Numerator % of Total Percent of Allocation Base Denominator Numerator % of Total Percent of Allocation Rasa 0 0 0 0 0 0 0 0 Cost to be Allocated i Cost Allocated Cost to be Allocated 0 0 Cost Allocated Costin e Allenated Cast Allnated
Transcribed Image Text:Gomez Company has two service departments (Personnel and Office) and two operating departments (Shoes and Clothing). Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments. Department Personnel Office Shoes Clothing Utilities Department Personnel. Office Shoes Clothing Direct Expenses Square Feet $ 18,000 25,000 103,000 15,000 The company also has $64,000 of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has 9 employees and the Clothing department has 3 employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales. Totals Personnel expense Department i Shoes Clothing 1,120 1,400 1. Allocate utilities expense to the four departments. 2. Allocate personnel expense to the Shoes and Clothing departments. 3. Allocate office expense to the Shoes and Clothing departments. Totals Office evnene 7,140 4,340 Allocation Base Sales Allocation Base $ 273,000 77,000 Alineatinn Rake 1,120 1,400 7,140 4,340 14,000 Percent of Allocation Base Denominator Numerator % of Total Percent of Allocation Base Denominator Numerator % of Total Percent of Allocation Rasa 0 0 0 0 0 0 0 0 Cost to be Allocated i Cost Allocated Cost to be Allocated 0 0 Cost Allocated Costin e Allenated Cast Allnated
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