(answered) – 1) Marathon Running Shop has two service departments (advertisingDescriptionSolution downloadThe Question1)Marathon Running Shop has two service departments (advertising and administrative) and two operating departments (shoes and clothing). During 2015, the departments had the following direct expenses and occupied the following amount of floor space.????Department Direct Expenses Square Feet??Advertising $ 20,000 ? ? ? 2,420 ? ???Administrative ? 22,000 ? ? ? 1,100 ? ???Shoes ? 133,000?? ? ? 8,580 ? ???Clothing ? 12,000 ? ? ? 9,900 ? ???The advertising department developed and distributed 180 advertisements during the year. Of these, 18 promoted shoes and 162 promoted clothing. The store sold $270,000 of merchandise during the year. Of this amount, $118,800 is from the shoes department, and $151,200 is from the clothing department. The utilities expense of $79,000 is an indirect expense to all departments.??Complete a departmental expense allocation spreadsheet for Marathon Running Shop. The spreadsheet should assign (1) direct expenses to each of the four departments, (2) the $79,000 of utilities expense to the four departments on the basis of floor space occupied, (3) the advertising department?s expenses to the two operating departments on the basis of the number of ads placed that promoted a department?s products, and (4) the administrative department?s expenses to the two operating departments based on?the amount of sales.Please see attachmentutilitiesdepartmentadvertisingadministrativeshoesclothingtotalsallocation baseadvertisingdepartmentshoesclothingtotalsallocation baseadministrativedepartmentshoesclothingtotalsallocation baseexpense totalsdirect expenseindirect utilitiesexpensestotal dept. exp.service deptexpensesadvertising deptadmin depttotal expenseallocatedpercent of allocation basenumeratordenominatorpercent of allocation basenumeratordenominatorpercent of allocation basenumeratordenominatorcost to be allocatedallocated cost% of Toalcost to be allocatedallocated cost%of totalcost to be allocatedallocated cost% of totalMarathon Running ShopDeparmental Expense Allocation Spreadsheetfor year ended Dec 31 2015advertisingadministrativeshoesclothing
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