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ACC 212 homework 7

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Exercise 24-1 Departmental expense allocations LO P2;Woh Che Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.;Indirect Expense;Cost;Allocation Base;Supervision;$;83,600;Number of employees;Utilities;61,000;Square feet occupied;Insurance;28,000;Value of assets in use;Total;$;172,600;Departmental data for the company?s recent reporting period follow.;Department;Employees;Square Feet;Asset Values;Materials;22;21,000;$;17,750;Personnel;11;5,250;2,130;Manufacturing;44;68,250;36,210;Packaging;33;10,500;14,910;Total;110;105,000;$;71,000;Exercise 24-3 Departmental contribution report LO P3;Below are departmental income statements for a guitar manufacturer. The manufacturer is considering dropping its electric guitar department since it has a net loss. The company classifies advertising, rent, and utilities expenses as indirect.;WHOLESALE GUITARS;Departmental Income Statements;For Year Ended December 31, 2013;Acoustic;Electric;Sales;$;101,700;$;84,200;Cost of goods sold;45,475;47,350;Gross profit;56,225;36,850;Operating expenses;Advertising expense;5,015;4,260;Depreciation expense-equipment;10,140;8,530;Salaries expense;19,300;17,900;Supplies expense;1,990;1,730;Rent expense;7,095;6,010;Utilities expense;2,995;2,590;Total operating expenses;46,535;41,020

 

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