Pepper Department store allocates its service department expenses to its various

Question

Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its Amount $45.000 $72.000 $108,000 Besis for alocation quare feet of floor space Expense Rent of doller sales miistrtive Nmber of employees The following information is available for its three operating (sales) departments DollarNumber of Seles employees 34300 36300 504000 $1.210.000 5300 5.500 29 otals What is the total sdvertising expense allocated to Department C? 533490 $72000. O $13.800 $31,790 $29.990

Explanation / Answer

Answer: $29,990

Advertising expense = $72,000

Allocation basis = $504,000 / $1,210,000

Allocation of advertising expense to Department C on the basis of dollar sales = $72,000 x $504,000/$1,210,000 = $29,990.

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