Question

Answer the following question with the data contained in Table 1 below. By default base of earnings, what amount of Salaries
Table 1. Profit Company 10,000,000 1.600.000 4,000,000 3,200,000 200.000 9,000,000 1,000,000 Account Earnings (revenue) Cost
Center Analysis New Construction Remodel $ 2.500.000 Industrial Retrofit $ 500,000 7,000,000 350,000 620,000 1,380,000 630,00
A) 50,000 B) 75,000 C) 120,000 D) 15,000
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Answer #1

salaries expense = $300,000

Total Revenue= $10,000,000

Revenue of remodel = $2,500,000

Salaries expense to be allocated to profit center of Remodel = Total salaries expense * (Revenue of Remodel / Total revenue)

Salaries expense to be allocated to profit center of Remodel = $300,000 * ($2,500,000 / $10,000,000) = $75,000

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