Marks Corporation has two operating departments, Drilling and
Grinding, and an office. The three categories of office expenses
are allocated to the two departments using different allocation
bases. The following information is available for the current
period:
Office Expenses | Total | Allocation Basis | |||||||||
Salaries | $ | 44,000 | Number of employees | ||||||||
Depreciation | 25,000 | Cost of goods sold | |||||||||
Advertising | 48,000 | Net sales | |||||||||
Item | Drilling | Grinding | Total | ||||||
Number of employees | 1,600 | 2,400 | 4,000 | ||||||
Net sales | $ | 348,000 | $ | 522,000 | $ | 870,000 | |||
Cost of goods sold | $ | 106,400 | $ | 173,600 | $ | 280,000 | |||
The amount of the advertising cost that should be allocated to Drilling for the current period is:
Multiple Choice
$19,200.
$82,400.
$28,800.
$62,400.
$348,000.
Answer : $19,200
Advertisement Cost pool = $48,000
allocation Base = Net sales
allocation of advertisement to Drilling = $48,000*(348,000/870,000) = $19,200 (Answer)
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of...
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Allocation Basis Total Number of employees Salaries $30,000 Depreciation Advertising Cost of goods sold 20,000 Net sales 40,000 Grinding Drilling Total Item Number of employees 1,000 1,500 2,500 $325,000 $475,000 $800,000 Net sales Cost of goods sold $75,000 $125,000 $200,000 The...
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Basis Salaries $ 34,000 Number of employees Depreciation 22,000 Cost of goods sold Advertising 42,000 Net sales Item Drilling Grinding Total Number of employees 600 1,400 2,000 Net sales $ 328,000 $ 492,000 $ 820,000 Cost of goods sold...
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Total Allocation Basis Salaries $ 34,000 Number of employees Depreciation 22,000 Cost of goods sold Advertising 46,000 Net sales Item Drilling Grinding Total Number of employees 1,320 1,980 3,300 Net sales $ 331,500 $ 484,500 $ 816,000 Cost of goods sold...
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