$4$

Exercise $22-6($Algo$)$ Departmental expense allocations LO P$2$

Gomez Company has two service departments $($Personnel and Office$)$ and two operating departments $($Shoes and Clothing$).$ Following are the direct expenses and square feet occupied by the four departments, and the total sales for the two operating departments.

$\backslash$table$[[5,,,,],[$points$,$Department,Direct Expenses,Square Feet,Sales$],[,$Personnel,$$20,000,2,420,],[,$Office,$22,000,1,100,],[,$Shoes,$133,000,8,580,$$$118,800],[,$Clothing,$12,000,9,900,151,200]]$

The company also has $$79,000$ of utilities expense, which is an indirect expense to all departments and is allocated to the four departments based on square feet occupied. The Shoes department has $18$ employees and the Clothing department has $162$ employees. Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales.

Allocate utilities expense to the four departments.

Allocate personnel expense to the Shoes and Clothing departments.

Allocate office expense to the Shoes and Clothing departments.

$\backslash$table$[[$Utilities$,$Allocation Base,Percent of Allocation Base,Cost to be Allocated,Allocated Cost$],[$Department$,,$Numerator,Denominator,$\%$ of Total,,$],[$Personnel$,,,,0,,],[$Office$,,,,0,,0],[$Shoes$,,,,0,,0],[$Clothing$,,,,0,,],[$Totals$,,,,0,,],[$Personnel expense,Allocation Base,Percent of Allocation Base,Cost to be Allocated,Allocated Cost$],[$Department$,,$Numerator,Denominator,$\%$ of Total,,$],[$Shoes$,,,,0,,],[$Clothing$,,,,0,,],[$Totals$,,,,0,,],[$Office expense,Allocation Base,Percent of Allocation Base,Cost to be Allocated,Allocated Cost$],[$Department$,,$Numerator,Denominator,$\%$ of Total,,$],[$Shoes$,,,,0,,],[$Clothing$,,,,0,,],[$Totals$,,,,0,,]]$