Super Grocery store allocates its service department expenses to its various ope

Question

Super Grocery store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Administrative Square feet of floor space $15,000 Advertising Amount of dollar sales $8,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Produce 1,000 $80,000 Bakery 800 $30,000 Meats 1,200 $42,000 Totals 3,000 $152,000 What is the total administrative expense allocated to the Meats department?

$6,000.

$9,000.

$4,145.

$1,200.

$3,000.

Explanation / Answer

total administrative expense allocated to the Meats department=Administrative Square feet of floor space $15,000 /total space*1,200 for meats=$6,000.

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