Departmental expense allocations LO P2 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 Department Direct Expenses Square Feet Sales Personnel $ 18,000 1,120 office 25,000 1.400 Shoes 103,000 7,140 $ 273,000 Clothing 15,000 4,340 77.000 The company also has $64,000 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 9 employees and the Clothing department has a employees Personnel expense is allocated to operating departments based on the number of employees. Office expense is allocated to operating departments based on sales 1. Allocate utilities expense to the four departments 2. Allocate personnel expense to the shoes and Clothing departments. 3. Allocate office expense to the shoes and Clothing departments, Check 3. Allocate office expense to the shoes and Clothing departments Utilities Allocation Base Cost to be Allocated Cost Allocated Percent of Allocation Base Nurnerator Denominator % of Total Allocation Base Cost to be Allocated Cost Allocated Department Personnel Office Shoes Clothing Totals Personnel expense Department Shoes Clothing Totals Office expense Department Shoes Clothing Totals Percent of Allocation Base Numerator Denominator of Total Allocation Base Cost to be Allocated Cost Allocated Percent of Allocation Base Numerator Denominator of Total
