Question

Jessica Porter works in both the jewelry department and the cosmetics department of a retail store. She assists customers in both departments and arranges and stocks merchandise in both departments. The store allocates her $13,800 annual wages between the two departments based on the time worked in the two departments in each two-week pay period. On average, Jessica reports the following hours and activities spent in the two departments.

Activities Hours
Selling in jewelry department 51.0
Arranging and stocking merchandise in jewelry department 9.0
Selling in cosmetics department 15.0
Arranging and stocking merchandise in cosmetics department 10.0
Idle time spent waiting for a customer to enter one of the departments 7.0

Required:
Allocate Jessica's annual wages between the two departments.

Answer 1

Answer and Explanation:

The computation of the allocation made of Jessica annual wages between two department is as follows:

Department Hours worked % of hours worked Wages Allocation

Jewelry (51 + 9) = 60 70.59% $13,800 $9,741

Cosmetics (15 + 10) = 25 29.41% $13,800 $4,059

Total 85 100 $13,800