More Information The managers had already drawn up their advertising plans for 2020 so the corporate plan would do the same advertising for them as they had planned. Douglas budgeted $1.5 million of total advertising cost for 2020, which was also the actual advertising costs in 2020.Additional Info: The manager of the East sales location, Tim Sneed, was not happy. He complained that the new allocation method was unfair and increased his advertising costs significantly. The East location sold high volumes of low-priced used cars and most of the corporate advertising budget related to new car sales. **Data Table Overview:**The table presents information on car sales and advertising costs across four sales locations in 2020. It is divided into three columns: 1. **Sales Location:** This column lists the geographical divisions where sales occurred - East, West, North, and South.2. **Actual Number of Cars Sold in 2020:** This column shows the total number of cars sold in each location. The figures are as follows: - East: 2,970 cars - West: 720 cars - North: 2,160 cars - South: 3,150 cars - Total sales across all locations: 9,000 cars3. **Advertising Costs in 2020 if Divisions Had Bought the Advertising:** This column estimates the advertising costs that would have been incurred by each sales location had they directly purchased advertising. The costs are as follows: - East: $381,600 - West: $487,600 - North: $572,400 - South: $678,400 - Total estimated advertising costs: $2,120,000The table uses horizontal lines to separate the data for different locations and to clearly distinguish the totals at the bottom. **Doug Dandy Auto Sales Advertising Cost Allocation**Doug Dandy Auto Sales utilizes various media to promote its products, including television, radio, newspapers, and the internet. By the end of 2019, the company's president, Doug Dandridge, decided that corporate headquarters would negotiate and pay for all advertising costs. These costs would then be distributed among the company's four sales locations based on the number of vehicles sold.**Requirements for Cost Allocation**Requirement 1: Determine the allocation of the 2020 advertising cost ($1,400,000) to each division using the following criteria:(a) **Dandridge’s Allocation Method**: Allocate based on the actual number of cars sold.(b) **Stand-Alone Method**: Allocate based on the amounts each division would have spent on their own advertising.(c) **Incremental-Allocation Method**: Allocate based on divisions ranked by dollars they would have spent on advertising in 2020. Note: For calculations under option (c), do not round intermediary calculations. Round the final answer to the nearest whole dollar. Enter "0" for amounts with zero values.**Cost Allocation Table**- **Sales Location**: - East - West - North - South - **Cost Allocated**: - [Enter calculated values based on the chosen allocation method]**Instructions for Managers**If managers had independently managed the advertising, their costs with the actual number of cars sold would be shown as indicated. To view the necessary data for calculations:- Click designated icons for advertising information and east sales location details.- Read additional instructions as required.**Note**: Data is modeled for educational purposes and requires user input based on the specific allocation criteria selected.

SOLUTION- ADVERTISING COST ARE TYPE OF FINANCIAL ACCOUNTING THAT COVERS EXPENSES ASSOCIATED WITH…

Doug Dandy Auto Sales uses dferent media to advertise its products (television, radio, newspaper, Internet, and so on). At the end of 2019, the company president, Doug Dandridge, decided that corporate headquarters would negotiate and pay for all advertising costs and allocate these costs to each of the company's four sales locations based on number of vehicles sold. (Click the icon to view the advertising information.) If managers had done the same advertising on their own, their advertising costs and the actual number of cars sold would be as follows: I (Click the icon to view the data.) (Click the icon to view information about the east sales location.) Read the ceguirements Requirement 1. Show the amount of the 2020 advertising cost (51,400,000) that would be allocated to each of the divisions under the following criteria: (a) Dandridge's allocation method based on actual number of cars sold, (b) the stand-alone method based on the amounts divisions would have spent on their own advertising. (c) the incremental-allocation method, with divisions ranked on the basis of dollars they would have spent on advertising in 2020. (Do not round intermediary calculations. Round the fnal answer to the nearest whole dollar. Enter a "0 for amount with a zero values.) (a.) Sales Location Cost Allocated East West North South

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q