Selected data for Miller Company, which operates three departments, follow: Department A Department B Department C Inventory $120,000 $432,000 $168,000 Equipment (average cost) $1,080,000 $648,000 $432,000 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 $120,000 Real estate taxes 36,000 Personal property taxes (on inventory and equipment) 57,600 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. Do not round until your final answer. Round final answer to the nearest whole number. Department A Department B Department C Depreciation Answer Answer Answer Real estate taxes Answer Answer Answer Personal property taxes Answer Answer Answer Personnel dept. expenses Answer Answer Answer

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

	Department A	Department B	Department C
Inventory	$120,000	$432,000	$168,000
Equipment (average cost)	$1,080,000	$648,000	$432,000
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				$120,000
Real estate taxes				36,000
Personal property taxes (on inventory and equipment)				57,600
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.

Do not round until your final answer. Round final answer to the nearest whole number.

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

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