Secure https://newconnect.mheducation.com/flow/connect.html 9 Marathon Running S

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Secure https://newconnect.mheducation.com/flow/connect.html 9 Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017 15 points s 18,800 38,880 128,8 16,008 2,309 2,e58 238,800 182,000 nts during the year Of these, 54 promoted shoes and 126 promoted clothing. Utilities expense of $63.000 is an indirect expense to all departments Complete a departmental expense allocation spreadsheet for Marethion Running Shop. The spreadsheet should assign (h) drect expenses to each of the four departments, (2) the $63,000 of utilities expense to the four occupied, () the advertising department's expenses to the two operating departments on the basis of the number of ads placed that amount of sales promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the departments on the basis of floor space References Numerator

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Solution:

Allocation of Utilities Expense Department Allocation Base Percentage of allocation base * Indirect Cost Allocated Cost Numerator Denominator % of Total Advertising Floor Space Occupied 300 5000 6.00% $63,000.00 $3,780.00 Administrative Floor Space Occupied 350 5000 7.00% $63,000.00 $4,410.00 Shoes Floor Space Occupied 2300 5000 46.00% $63,000.00 $28,980.00 Clothing Floor Space Occupied 2050 5000 41.00% $63,000.00 $25,830.00 Totals $63,000.00

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