Ruby Pharmacy allocates indirect expenses to its three departments on the basis of sales. For the year ended 30 June 2024, the following allocations were made.

Required

(a) Determine the allocation of indirect expenses for the year ended 30 June 2025, using sales.

(b) Are the results of requirement

(a) logical for an equitable allocation of indirect expenses? Explain.

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Dispensary items Cosmetics Hair care Total Sales Indirect expenses $777 420 426 000 $388 710 213 000 $129 570 $1 295 700 71 000 710 000 Assume that, during the year ended 30 June 2025, the dispensary items and cosmetics departments have the same sales they had in the previous year, but hair care sales have increased to $163 500 because of the popularity of a new product line. Assume further that the total indirect expenses of $710 000 have decreased by 25%.