Question

A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $12,000 indicates that Dept. Y had a direct expense of $1,300 for deliveries and Dept. Z had no direct expense. The indirect expenses are $10,700. The analysis also indicates that 60% of regular delivery requests originate in Dept. Y and 40% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are: Multiple Choice $7,330; $6,000. $7,330; $4,670. $7,720; $4,280. $7,200; $4,800. $6,000; $6,000.

Answer 1

Answer:

$7,720; $4,280

Explanation:

total delivery expense = $12,000

                                                      Dept. Y                           Dept. Z

direct expenses                           $1,300                                   $0*

indirect expenses             ($10,700 x 60%)               ($10,700 x 40%)

                                                     $6,420                            $4,280  

total delivery expenses               $7,720                            $4,280

*Since no direct delivery expenses were generated by Dept. X, no amount should be allocated. Indirect expenses are allocated based on the percent generated by each department.