Question

Ready Company has two operating (production) departments: Assembly and Painting. Assembly has 150 employees and occupies 44,000 square feet; Painting has 100 employees and occupies 36,000 square feet. Indirect factory expenses for the current period are as follows: Administration$80,000 Maintenance$100,000 Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The amount of maintenance expenses that should be allocated to the Painting Department for the current period is:Multiple Choice$110,000.$55,000.$103,000.$48,000.$45,000.

Answer 1

Answer:

$77,000

Explanation:

Calculation to determine what The amount of maintenance expenses that should be allocated to the Painting Department for the current period is:

Administration=$80,000×[100/(150 + 100)] Administration=$32,000

Maintenance=$100,000×[36,000/(44,000 + 36,000)]

Maintenance=$45,000

Total$ 77,000

($32,000+$45,000)

Therefore The amount of maintenance expenses that should be allocated to the Painting Department for the current period is:$77,000