A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $25,000 indicates that Dept. Y had a direct wage expense of $3,200 and Dept. Z had a direct wage expense of $5,300. 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:

Question

Business

Elian Yu

13 January, 12:41

A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $25,000 indicates that Dept. Y had a direct wage expense of $3,200 and Dept. Z had a direct wage expense of $5,300. 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:

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Answers (1)

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Davion Holder · Answer 1

Dept. Y wages expense = $11,450

Dept. X wages expense = $13,550

Explanation:

Given:

Total wage expense = $25,000

Dept. Y direct wage expense = $3,200

Dept. Z direct wage expense = $5,300

Dept allocation ratio = 1:1

Computation:

Indirect wages = Total wage expense - Dept. Y direct wage expense - Dept. Z direct wage expense

Indirect wages = $25,000 - $3,200 - $5,300

Indirect wages = $16,500

Dept. Y part in Indirect wages = 1/2[$16,500] = $8,250

Dept. X part in Indirect wages = 1/2[$16,500] = $8,250

Dept. Y wages expense = $3,200 + $8,250

Dept. Y wages expense = $11,450

Dept. X wages expense = $5,300 + $8,250

Dept. X wages expense = $13,550