uper Grocery store allocates its service department expenses to its various operating (sales) departments. The following...
uper Grocery store allocates its service department expenses to
its various operating (sales) departments. The following data is
available for its service departments:
| Expense | Basis for allocation | Amount | |||
| Administrative | Square feet of floor space | $ | 30,000 | ||
| Advertising | Amount of dollar sales | $ | 23,000 | ||
The following information is available for its three operating
(sales) departments:
| Department | Square Feet | Dollar Sales | ||||
| Produce | 1,350 | $ | 95,000 | |||
| Bakery | 900 | $ | 45,000 | |||
| Meats | 2,250 | $ | 57,000 | |||
| Totals | 4,500 | $ | 197,000 | |||
What is the total administrative expense allocated to the Meats
department?
Multiple Choice
-
$15,000.
-
$19,500.
-
$6,168.
-
$2,250.
-
$4,500.
Homework Answers
OPTION: $15000
EXPLANATION:
administrative expense allocated based on Square feet of floor space occupied by each department.
therefore,
total administrative expense allocated to the Meats department = $30000 x (2250/4500)
= $15000
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