Ice House Industries, Inc -Based on the Above Data, Determine the Administrative Cost Allocated

question 115

Short Answer

Ice House Industries, Inc. has three operating departments: Cooking, Churning, and Freezing. Indirect factory costs for the current period were Administrative $560,000 and Maintenance $98,000. Administrative costs are allocated to operating departments based on the number of workers and maintenance costs are allocated to operating departments based on square footage occupied.
$\begin{array} { | l | c | c | c | } \hline & \begin{array} { c } \text { Cooking } \\\text { Department }\end{array} & \begin{array} { c } \text { Churning } \\\text { Department }\end{array} & \begin{array} { c } \text { Freezing } \\\text { Department }\end{array} \\\hline \begin{array} { l } \text { Number of } \\\text { employees }\end{array} & 2,940 \text { employees } & 4,900 \text { employees } & 1,960 \text { employees } \\\hline \text { Square feet occupied } & 33,250 \text { Sq. Ft. } & 38,000 \text { Sq. Ft } & 23,750 \text { Sq. Ft. } \\\hline\end{array}$
-Based on the above data, determine the administrative cost allocated to each operating department of Ice House Industries, Inc.
A Cooking: $\$ 168,000$$\quad$ Churring: $\$ 280,000$ $\quad$ Freezing: $\$ 112,000$
B. Cooking: $\$ 186,666$$\quad$ Churning: $\$ 186,666$ $\quad$ Freezing: $\$ 186,666$
C. Cooking: $\$ 112,000$ $\quad$ Churning: $\$ 280,000$ $\quad$ Freezing: $\$ 168,000$
D. Cooking: $\$ 280,000$ $\quad$ Churning: $\$ 112,000$ $\quad$ Freezing: $\$ 168,000$
E Cookine: $\$ 219,333$ $\quad$ Churnine: $\$ 219,333$ $\quad$ Freezing: $\$ 219,333$

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Definitions:

Statutory Agent

A person or entity appointed to receive legal documents on behalf of a corporation or other legal entity.

Individually Liable

Responsibility of a person to bear the loss or fulfill obligations from their personal assets, independently of others' liabilities.

Preincorporation Contracts

Agreements entered into on behalf of a corporation not yet legally formed, which may bind the corporation once it comes into existence.

Promoter

A person or company that finances or organizes events, especially in entertainment or sports.