1. Allocating joint costs to products using a value basis method is based on their relative:

Sales values.

Direct costs.

Gross margins.

Total costs.

Variable costs.

2.

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. Compute the amount of Purchasing department expense to be allocated to Fabrication.

	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

$6,400.

$9,900.

$8,100.

$17,600.

$25,600.