28. Pepper Department store allocates its service department expenses to its var

Question

28. Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments:

The following information is available for its three operating (sales) departments:

What is the total advertising expense allocated to Department C?

A. $52,000.

B. $21,737.

C. $25,237.

D. $23,537.

E. $10,800.

PLEASE ADD EXPLANATION

Expense Basis for allocation Amount Rent Square feet of floor space $35,000 Advertising Amount of dollar sales $52,000 Administrative Number of employees $78,000

Explanation / Answer

What is the total advertising expense allocated to Department C?

Advertising expenses allocation to department C = 52000*464000/1110000 = $21737

so answer is b) $21737

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