Question

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:

Answer 1

Dept.Y wages expense = $11,450

Dept.X wages expense = $13,550

Step-by-step 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