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: $\begin{array}{ll}
\text { Administration } & \$ 80,000 \
\text { Maintenance } & \$ 100,000
\end{array}$ Administration is allocated based on workers in each department; maintenance is allocated based on square footage. The amount of administration expenses that should be allocated to the Painting Department for the current period is:
A) $48,000.
B) $55,000.
C) $103,000.
D) $32,000.
E) $110,000.

Question

Quizplus · Accepted Answer

The administration expenses are allocated based on the number of employees. The Painting Department has 100 out of a total of 250 employees (150 in Assembly + 100 in Painting). Therefore, the allocation is $ \frac{100}{250} \times \$80,000 = \$32,000 $.

Ready Company Has Two Operating (Production) Departments: Assembly and Painting Administration $80,000 Maintenance $100,000\begin{array}{ll}\text { Administration } & \$ 80,000 \\\text { Maintenance } & \$ 100,000\end{array} Administration Maintenance ​$80,000$100,000​

Ready Company Has Two Operating (Production) Departments: Assembly and Painting $\begin{array}{ll}\text { Administration } & \$ 80,000 \\\text { Maintenance } & \$ 100,000\end{array}$