Required information [The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Housevares Sporting Total $ 45,000 25,000 10,000 $80,000 Square Feet 2,160 1,840 4,000 Housewares Sporting Allocate $45,000 of rent using square feet occupied Sales $ 190,000 310,000 $500,000 2. Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet occupled. Advertising expense is allocated based on total sales. Insurance expense is allocated based on the value of insured assets. Value of Insured. Assets $ 41,000 59,000 $ 100,000 Square Footage Percent of Total Cost Allocated
Required information [The following information applies to the questions displayed below.] National Retail has two departments, Housewares and Sporting. Indirect expenses for the period follow. Rent Advertising Insurance Total The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect expenses to each department based on the square feet it occupied. The company now wants to allocate indirect expenses using the allocation bases shown below. Department Housevares Sporting Total $ 45,000 25,000 10,000 $80,000 Square Feet 2,160 1,840 4,000 Housewares Sporting Allocate $45,000 of rent using square feet occupied Sales $ 190,000 310,000 $500,000 2. Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet occupled. Advertising expense is allocated based on total sales. Insurance expense is allocated based on the value of insured assets. Value of Insured. Assets $ 41,000 59,000 $ 100,000 Square Footage Percent of Total Cost Allocated
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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![Required information
[The following information applies to the questions displayed below.]
National Retail has two departments, Housewares and Sporting.
Indirect expenses for the period follow.
Rent
Advertising
Insurance
Total
The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of
indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect
expenses to each department based on the square feet it occupied.
The company now wants to allocate indirect expenses using the allocation bases shown below.
Department
Housevares
Sporting
Total
$ 45,000
25,000
10,000
$80,000
Square Feet
2,160
1,840
4,000
Housewares
Sporting
Allocate $45,000 of rent using square feet occupied
Sales
$ 190,000
310,000
$500,000
2. Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet occupled. Advertising expense
is allocated based on total sales. Insurance expense is allocated based on the value of Insured assets.
Value of Insured.
Assets
$ 41,000
59,000
$ 100,000
Square Footage Percent of Total
Cost Allocated](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fedc2d1f9-b77d-4fbd-9e59-0ce4099c2b3d%2F316a3128-fdd3-4413-8036-48cd529cce7b%2F7jt8xxh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
National Retail has two departments, Housewares and Sporting.
Indirect expenses for the period follow.
Rent
Advertising
Insurance
Total
The company occupies 4,000 square feet of a rented building. In prior periods, the company divided the $80,000 of
indirect expenses by 4,000 square feet to find an average cost of $20 per square foot, and then allocated indirect
expenses to each department based on the square feet it occupied.
The company now wants to allocate indirect expenses using the allocation bases shown below.
Department
Housevares
Sporting
Total
$ 45,000
25,000
10,000
$80,000
Square Feet
2,160
1,840
4,000
Housewares
Sporting
Allocate $45,000 of rent using square feet occupied
Sales
$ 190,000
310,000
$500,000
2. Allocate indirect expenses to the two departments. Rent expense is allocated based on square feet occupled. Advertising expense
is allocated based on total sales. Insurance expense is allocated based on the value of Insured assets.
Value of Insured.
Assets
$ 41,000
59,000
$ 100,000
Square Footage Percent of Total
Cost Allocated
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