A retail store has three departments, 1, 2, and 3, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows: Dept. 1 $110,000 Dept. 2 $213,750 Dept. 3 $151,250 How much advertising expense should be allocated to Department 2 if the allocation is based on departmental sales? A. $11,000 B. $14,000 C. $16,667 D. $22,500 E. $50,000

A retail store has three departments, 1, 2, and 3, and does general advertising that benefits all departments. Advertising expense totaled $50,000 for the year, and departmental sales were as follows: Dept. 1 $110,000 Dept. 2 $213,750 Dept. 3 $151,250 How much advertising expense should be allocated to Department 2 if the allocation is based on departmental sales? A. $11,000 B. $14,000 C. $16,667 D. $22,500 E. $50,000

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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