The following is a partially completed lower section of a de

The following is a partially completed lower section of a departmental expense allocation spreadsheet for B total amounts of direct and indirect expenses for the four departments. Purch operating departments on the basis of purchase orders. Mairn footage. Com ickland. It reports t asing department expenses are allocated to the basis of purchase orders. Maintenance department expenses are allocated based on square pute the amount of Purchasing department expense to be allocated to Fabrication. Purchasing Maintenance Fabrication Assembly Operating costS No. of purchase orders sq. ft. of space $51,000 $ 29,400 $115,000 $81,000 15 4,250 1,750

Solution

Total purchase orders =15+5=20

Total Purchasing expenses=$51,000

Purchasing Department Expenses to be allocated to Fabrication:

= total Purchasing expenses/total Purchase orders x Fabrication Purchase orders =(51,000/20) x 15=$38,250 Hence Option 5 is correct