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. Compute the amount of Maintenance department expense to be allocated to Assembly. Department Direct Expenses Number Purchase Orders Square FeetPurchasing $ 32,000 Maintenance 18,000 Fabrication 96,000 16 3,300Assembly 62,000 4 2,700Multiple Choice$9,000.$9,900.$6,400.$25,600.$8,100.
Question
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. Compute the amount of Maintenance department expense to be allocated to Assembly. Department Direct Expenses Number Purchase Orders Square FeetPurchasing 9,000.6,400.8,100.
Solution
To calculate the amount of Maintenance department expense to be allocated to Assembly, we need to know the total square footage and then determine what percentage of that is occupied by the Assembly department.
First, let's calculate the total square footage:
Fabrication: 3,300 sq ft Assembly: 2,700 sq ft Total: 3,300 sq ft + 2,700 sq ft = 6,000 sq ft
Next, let's calculate the percentage of the total square footage that is occupied by the Assembly department:
(Assembly sq ft / Total sq ft) * 100 = (2,700 sq ft / 6,000 sq ft) * 100 = 45%
Finally, we can calculate the amount of Maintenance department expense to be allocated to Assembly:
(Maintenance department expense * Assembly's percentage of total sq ft) = 8,100.
So, the amount of Maintenance department expense to be allocated to Assembly is $8,100.
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