Question

question 15

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage.

	Purchasing				Maintenance				Fabrication				Assembly
Operating costs	$	38,000			$	21,600			$	102,000			$	68,000
No. of purchase orders										16				4
Sq. ft. of space										3,600				2,400

Required:

Compute the amount of Purchasing department expense to be allocated to Assembly

Answer 1

Expenses allocated to purchasing department
Operating cost	$                 38,000
No of purchase order by assembly	4
Total No of Purchase order	20
Cost allocated                 =	$                   7,600
(38000*4)/20
*The cost of Purchasing is allocated based on Purchase order

answered by: anonymous