A hardware store has three departments, A, B, and C, and does general advertising that benefits all departments. Advertising expense totalled $60,000 for the year, and departmental sales were as follows: Department Sales ($) Dept. A 125,000 Dept. B 275,000 Dept. C 200,000 How much advertising expense should be allocated to Department B if the allocation is based on departmental sales?
A hardware store has three departments, A, B, and C, and does general advertising that benefits all departments. Advertising expense totalled $60,000 for the year, and departmental sales were as follows: Department Sales ($) Dept. A 125,000 Dept. B 275,000 Dept. C 200,000 How much advertising expense should be allocated to Department B if the allocation is based on departmental sales?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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Transcribed Image Text:A hardware store has three departments, A, B, and C, and does general
advertising that benefits all departments. Advertising expense totalled
$60,000 for the year, and departmental sales were as follows:
Department Sales ($)
Dept. A
125,000
Dept. B
275,000
Dept. C
200,000
How much advertising expense should be allocated to Department B if the
allocation is based on departmental sales?
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