The following is a partially completed lower section of a departmental expense allocation spreadsheet for Bookworm Bookstore. It reports the total amounts of direct and indirect expenses allocated to its five departments. Complete the spreadsheet by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments.
|
|
|
|
Allocation of Expenses to Departments |
||||
|
|
Allocation Base |
Expense Account Balance |
Advertising Dept. |
Purchasing Dept. |
Books Dept. |
Magazines Dept. |
Newspapers Dept. |
|
Total department expenses |
|
$654,000 |
$22,000 |
$30,000 |
$425,000 |
$86,000 |
$91,000 |
|
Service department expenses |
|
|
|
|
|
|
|
|
Advertising department Sales |
|
|
? |
|
? |
? |
? |
|
Purchasing department Purch. Orders |
|
|
|
? |
? |
? |
? |
|
Total expenses allocated to |
|
|
|
|
|
|
|
|
Operating departments |
|
? |
$0 |
$0 |
? |
? |
? |
Advertising and purchasing department expenses are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows.
|
Department |
Sales |
Purchase Orders |
|
Books |
$448,000 |
424 |
|
Magazines |
144,000 |
312 |
|
Newspapers |
208,000 |
264 |
|
Total |
$800,000 |
1,000 |