Question

Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). The table that follows shows the direct expenses incurred and square footage occupied by all four departments, as well as total sales for the two operating departments for the year 2017 Square Feet Sales Advertising Administrative Shoes clothing 13,000 26,000 130,000 15,000 1,710 1,710 9,500 6,080 $186,000 124,000 The advertising department developed and distributed 230 advertisements during the year. Of these, 69 promoted shoes and 161 promoted clothing. Utilities expense of $71,000 is an indirect expense to all departments. Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign() direct expenses to each of the four departments, (2) the $71,000 of utilities expense to the four depertments on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of the number of ads placed that amount of sales. promoted a department's products, and (4) the administrative department's expenses to the two operating departments based on the Cost to be Allocated ities Allocated Cos Allocation Base ase Numerator Denominator% of Total Adm Shoes Clothing Totals Cost to be Percent of Allocation Base Allocated ertising Allocation Base Allocated Cost Department Numerator of Total < Prey9 of 12

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Utilities	Allocation base	% of allocation base			Cost to be allocated	Allocated cost
Department:	Floor Space	Numerator	Denominator	% of total
Advertising	Floor Space	1,710	19,000	9%	$     71,000.00	$      6,390.00
Administrative	Floor Space	1,710	19,000	9%	$     71,000.00	$      6,390.00
Shoes	Floor Space	9,500	19,000	50%	$     71,000.00	$    35,500.00
Clothing	Floor Space	6,080	19,000	32%	$     71,000.00	$    22,720.00
Totals		19,000				$    71,000.00

Advertising	Allocation base	% of allocation base			Cost to be allocated	Allocated cost
Department:	Adds played	Numerator	Denominator	% of total
Shoes	Adds played	69	230	30%	$     19,390.00	$      5,817.00
Clothing	Adds played	161	230	70%	$     19,390.00	$    13,573.00
Totals		230				$    19,390.00

Administrative	Allocation base	% of allocation base			Cost to be allocated	Allocated cost
Department:	Amount of Sales	Numerator	Denominator	% of total
Shoes	Amount of Sales	186,000	310,000	60%	$     32,390.00	$    19,434.00
Clothing	Amount of Sales	124,000	310,000	40%	$     32,390.00	$    12,956.00
Totals		310,000				$    32,390.00

	Expense Totals	Advertising	Administrative	Shoes	Clothing
Total department expenses	$      184,000.00	$    13,000.00	$    26,000.00	$ 130,000.00	$    15,000.00
Indirect Utilities expenses	$         71,000.00	$       6,390.00	$      6,390.00	$     35,500.00	$    22,720.00
Total Departmental Expenses	$      255,000.00	$    19,390.00	$    32,390.00	$ 165,500.00	$    37,720.00
Service Department expenses:
Advertising		$ (19,390.00)		$       5,817.00	$    13,573.00
Administrative			$ (32,390.00)	$     19,434.00	$    12,956.00
Total Expense allocated	$      255,000.00	$                    -	$                   -	$ 190,751.00	$    64,249.00