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Advertising department expenses of $38,900 and purchasing department expenses of $38,900 of Cozy Bookstore are allocated to o
Allocation Base Cost to be Allocated Allocated Cost P ercent of Allocation Base Numerator Denominator % of Total Purchasing D
COZY BOOKSTORE Departmental Expense Allocation Spreadsheet Expense Totals Advertising Purchasing Books $ 555,000 $ 38,900 $ 3
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Answer #1
Advertising Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost
Department Sales Numerator Denominator % of Total
Books Dept 180,000 180,000 360000 50% 38900 19450
Magazines Dept 108,000 108,000 360000 30% 38900 11670
Newspapers Dept 72,000 72,000 360000 20% 38900 7780
Totals 360000 100% 38900
Purchasing Allocation Base Percent of Allocation Base Cost to be Allocated Allocated Cost
Department Number of orders Numerator Denominator % of Total
Books Dept 984 984 2400 41% 38900 15949
Magazines Dept 600 600 2400 25% 38900 9725
Newspapers Dept 816 816 2400 34% 38900 13226
Totals 2400 100% 38900
2
COZY BOOKSTORE
Departmental Expense Allocation Spreadsheet
Allocation Base Expense Totals Advertising Purchasing Books Magazines Newspapers
Total department expenses 555000 38900 38900 144300 111000 221900
Service Dept. expenses
Advertising Dept. -38900 19450 11670 7780
Purchasing Dept. -38900 15949 9725 13226
Total expenses allocated 555000 0 0 179699 132395 242906
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