Hi, I need assistance on this question. Not understanding the way to break it do

Question

Hi, I need assistance on this question. Not understanding the way to break it down. Can you please break down the answer for me clearly, I would like to understand how this problem is done.

Advertising department expenses of $71,000 and purchasing department expenses of $78,900 of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Department Sales Purchase Orders Books Magazines Newspapers $201,600 1,225 725 titi 92,400 126,000 Total 420,000 2,500

Explanation / Answer

Advertising Allocation base % of allocation Base Cost to be allocated C Allocated Cost (sales in $) Numerator Denominator % of Total T=N/D*100 T*C Department Books Dept 201600 201600 420000 48 71000 34080 magazines Dept 92400 92400 420000 22 71000 15620 Newspaper Dept 126000 126000 420000 30 71000 21300 Total 420000 100 71000 Purchasing Allocation base % of allocation Base Cost to be allocated C Allocated Cost Purchase orders Numerator Denominator % of Total T=N/D*100 T*C Department Books Dept 1225 1225 2500 49 78900 38661 magazines Dept 725 725 2500 29 78900 22881 Newspaper Dept 550 550 2500 22 78900 17358 Total 2500 100 78900 Allocation Of expenses to departments Expenses Accounts Balance Advertising dept Purchasing Dept Books dept Magazines Dept Newspaper Dept Allocation base 789000 71000 78900 213000 157800 268300 Advertising dept Sales -71000 34080 15620 21300 Purchasing Dept Purchasing order -78900 38661 22881 17358 Total Expenses allocated to Opeartin dept 789000 0 0 285741 196301 306958

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