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:
Administration is allocated based on workers in each department; maintenance is allocated based on square footage.
-The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is:
A)$48,000.
B)$55,000.
C)$103,000.
D)$104,000.
E)$110,000.

Question

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: 
Administration is allocated based on workers in each department; maintenance is allocated based on square footage.
-The total amount of indirect factory expenses that should be allocated to the Assembly Department for the current period is:
A)$48,000. 
B)$55,000. 
C)$103,000. 
D)$104,000. 
E)$110,000.

Quizplus · Accepted Answer

Indirect factory expenses allocated to a department are typically calculated based on a predetermined overhead rate or allocation base that is relevant to the department's operations. Without specific details on the calculation method or the allocation base (e.g., machine hours, labor hours, or direct labor cost), it's not possible to provide a detailed explanation. However, the correct answer among the options provided is chosen based on the information that would have been given in the question scenario.

Ready Company Has Two Operating (Production)departments: Assembly and Painting