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The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland....

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage. Compute the amount of Purchasing department expense to be allocated to Fabrication.

PURCHASING MAINTENANCE FABRICATION ASSEMBLY
ORDERING COSTS 50,000 28,800 114,000 80,000
NUMBER OF PURCHASE ORDERS 16 4
SQUARE FT OF SPACE 4,200 1,800

A. 8,640

B. 20,160

C. 40,000

D. 10,000

E. 27,500

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Answer #1
Answer

correct option is "C " - $ 40,000

Working Note
Allocation to fabrication
50000*16/(16+4)
50000*16/20
$40,000
therefore
option C is correct : $ 40,000
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