1)

A retail store has three departments, S, T, and U, and does general advertising that benefits all departments. Advertising expense totaled $41,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department T based on departmental sales. (Do not round your intermediate calculations.)

Department S	$137,000
Department T	215,050
Department U	160,450
Total	512,500

$19,367.

$16,700.

$13,700.

$17,204.

$41,000.

2)

Rent and maintenance expenses would most likely be allocated based on:

Sales volume by department.

Square feet of floor space occupied.

Number of hours worked.

Number of invoices processed.

Number of employees in each department.

3)

The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports the total amounts of direct and indirect expenses for the four departments. Purchasing department expenses are allocated to the operating departments on the basis of purchase orders. Maintenance department expenses are allocated based on square footage.

	Purchasing	Maintenance	Fabrication	Assembly
Operating costs	$32,000	$18,000	$96,000	$62,000
No. of purchase orders			16	4
Sq. ft. of space			3,300	2,700

Required: Compute the amount of Purchasing department expense to be allocated to Assembly.

$6,400.

$9,900.

$8,100.

$14,400.

$25,600.

4)

Capital budgeting decisions are generally based on:

Tentative and potentially unreliable predictions of future outcomes.

Predictions of future outcomes where risk is eliminated.

Results from past outcomes only.

Results from current outcomes only.

Speculation of interest rates and economic performance only.