Question

A company has two departments, Y and Z that incur wage expenses. An analysis of the total wage expense of $40,000 indicates that Dept. Y had a direct wage expense of $6,200 and Dept. Z had a direct wage expense of $9,800. 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:

Answer 1

Dept. Y = $18,200

Dept. Z = $21,800

Step-by-step explanation:

Wages expense for this question consist of direct wages and indirect wages. The direct wages are allocated to their respective departments while the indirect wages are apportioned between the two departments.

Therefore, first do the allocation then the remainder $24,000 is apportioned equally between the two departments, Dept. Y and Dept. Z.

Dept. Y Dept. Z

Departmental wage expenses :

Direct wages $6,200 $9,800

Indirect wages $12,000 $12,000

Total $18,200 $21,800