45. Marks Corporation has two operating departments, Drilling and Grinding, and

Question

45. 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:

The amount of the total office expenses that should be allocated to Drilling for the current period is:

Multiple Choice

$60,120.

$90,600.

$105,200.

$152,000.

$600,000.

Office Expenses Total Allocation Basis Salaries $ 50,000 Number of employees Depreciation 34,000 Cost of goods sold Advertising 68,000 Net sales

Explanation / Answer

A. $60,120

Salaries($50,000 * 1,800/4,500) $20,000 Depreciation($34,000 * $140,600/$370,000) $12,920 Advertising($68,000 * $388,000/$970,000) $27,200 Total $60,120

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