Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 280 employees and occupies...
Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 280 employees and occupies 55,200 square feet; Painting has 120 employees and occupies 36,800 square feet. Indirect factory expenses for the current period are as follows: Administration $ 86,000 Maintenance $ 102,000 Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The amount of maintenance expenses that should be allocated to the Assembly Department for the current period is:
| Administration | $ | 86,000 | |
| Maintenance | $ | 102,000 | |
Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The amount of maintenance expenses that should be allocated to the Assembly Department for the current period is:
Homework Answers
Maintenance expenses allocated to assembly department
Allocation base = Square footage
= 102,000 * 55,200/ (55,200+36,800)
= 102,000 * 55,200 / 92,000
= 61,200
Comment if you face any issues
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