A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $19,000 indicates that Dept. Y had a direct wage expense of $2,000 and Dept. Z had a direct wage expense of $3,500. The remaining expenses are indirect and analysis indicates they should be allocated evenly between the two departments. Departmental wage expenses for Dept. Y and Dept. Z, respectively, are:
A) $9,500; $9,500.
B) $6,750; $6,750.
C) $8,750; $10,250.
D) $10,250; $8,750.
E) $2,000; $3,500.

Question

Quizplus · Accepted Answer

The total indirect expenses are $19,000 - $2,000 - $3,500 = $13,500. Since the remaining expenses should be allocated evenly between the two departments, each department's share of the indirect expenses is $13,500 / 2 = $6,750. Adding the direct and indirect expenses for each department gives:
Dept. Y: $2,000 + $6,750 = $8,750
Dept. Z: $3,500 + $6,750 = $10,250
Therefore, the answer is C.

A Company Has Two Departments, Y and Z That Incur