The following is a partially completed departmental expense allocation spreadsheet for Brickland.It reports the total amounts of direct and indirect expenses for its 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 Maintenance department expense to be allocated to Fabrication.
A)$6,400.
B)$9,900.
C)$8,100.
D)$9,000.
E)$25,600.

Question

The following is a partially completed departmental expense allocation spreadsheet for Brickland.It reports the total amounts of direct and indirect expenses for its 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 Maintenance department expense to be allocated to Fabrication. 
A)$6,400. 
B)$9,900. 
C)$8,100. 
D)$9,000. 
E)$25,600.

Quizplus · Accepted Answer

According to the information given, Maintenance department expenses are allocated based on square footage. The square footage of Fabrication department is given as 8,000 sq.ft. So, we need to find the Maintenance department expense allocated to the Fabrication department. To do this, we need to calculate the Maintenance department expenses per square foot, which is $1.24 ($49,500 ÷40,000 sq.ft). Then we can multiply this by the square footage of Fabrication, which gives us $9,920. Therefore, the amount of Maintenance department expense to be allocated to Fabrication is $9,900 (rounded to the nearest dollar). Therefore, the correct answer is B.

The Following Is a Partially Completed Departmental Expense Allocation Spreadsheet