Able Company has two operating (production) departments: Assembly and Fabricating. Assembly has 150 employees and occupies 44,000 square feet; Fabricating 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

Quizplus · Accepted Answer

The Assembly Department should be allocated indirect factory expenses based on the number of workers and square footage. Assuming Administration and Maintenance are the only indirect expenses, Administration is allocated based on the number of workers (150 in Assembly out of a total of 250 workers) and Maintenance based on square footage (44,000 out of a total of 80,000 square feet). Without the specific amounts for Administration and Maintenance expenses, a precise allocation can't be calculated. However, the question seems to imply that the calculation has been made, leading to one of the provided choices. Since we can't calculate the exact figures from the given information, the correct answer is inferred based on the information that would typically be used for such allocations.

Able Company Has Two Operating (Production) Departments: Assembly and Fabricating