The Following Information Is Available for Charter Company Complete the Following Chart to Determine the Total Cost for |

question 54

Essay

The following information is available for Charter Company:
$$\begin{array} { | c | r | r | r | } \hline { \text { Item } } & \text { Department1 } & \text { Department 2 } & { \text { Total } } \\\hline \text { Equipment value } & \$ 500,000 & \$ 250,000 & \$ 750,000 \\\hline \text { Square footage } & 25,000 \text { sq.ft. } & 35,000 \text { sq.ft. } & 60,000 \text { sq.ft } \\\hline \text { Sales } & \$ 1,250,000 & \$ 725,000 & \$ 1,975,000 \\\hline\end{array}$$ Complete the following chart to determine the total cost for each department,using the most appropriate method to apportion the indirect costs.
$$\begin{array} { | l | r | r | r | } \hline { \text { Cost } } & \text { Department 1 } & \text { Department 2 } & { \text { Total } } \\\hline \text { Depreciation } & & & \$ 120,000 \\\hline \text { Utilities } & & & \$ 45,000 \\\hline \text { Sales Commissions } & & & \$ 59,250 \\\hline \text { Rent } & & & \$ 150,000 \\\hline \text { TOTALS } & & & \$ 374,250 \\\hline\end{array}$$

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Definitions:

Online Shoe Retailer

A business that sells shoes through the internet, enabling customers to purchase footwear online.

All-inclusive Vacation

A holiday package which includes not just accommodation but also food, drinks, activities, and entertainment, often at a resort.

Vacation Packages

Pre-arranged travel plans offered by agencies, including components like flights, hotels, and activities, often at a bundled price.

Price-cost Margins

The difference between the selling price of a product and its production cost, indicating the profit margin per unit sold.