1.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	31,000			Number of employees
Depreciation		21,000			Cost of goods sold
Advertising		41,000			Net sales

Item	Drilling			Grinding			Total
Number of employees		800			1,200			2,000
Net sales	$	330,000		$	495,000		$	825,000
Cost of goods sold	$	79,800		$	130,200		$	210,000

The amount of salaries that should be allocated to Drilling for the current period is:

2.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	42,000			Number of employees
Depreciation		26,000			Cost of goods sold
Advertising		58,000			Net sales

Item	Drilling				Grinding				Total
Number of employees		1,960				2,940				4,900
Net sales	$	344,500			$	503,500			$	848,000
Cost of goods sold	$	93,000			$	155,000			$	248,000

The amount of the total office expenses that should be allocated to Grinding for the current period is

3.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses	Total				Allocation Basis
Salaries	$	54,000			Number of employees
Depreciation		36,000			Cost of goods sold
Advertising		70,000			Net sales

Item	Drilling			Grinding			Total
Number of employees		2,000			3,000			5,000
Net sales	$	390,000		$	585,000		$	975,000
Cost of goods sold	$	148,200		$	241,800		$	390,000

The amount of depreciation that should be allocated to Drilling for the current period is

4.

The following relates to a proposed equipment purchase:

Cost	$	155,000
Salvage value	$	4,000
Estimated useful life		4	years
Annual net cash flows	$	51,600
Depreciation method	Straight-line

Ignoring income taxes, the annual net income amount used to calculate the accounting rate of return is:

5.

The following present value factors are provided for use in this problem.

Periods	Present Value of $1 at 8%			Present Value of an Annuity of $1 at 8%
1		0.9259			0.9259
2		0.8573			1.7833
3		0.7938			2.5771
4		0.7350			3.3121

Xavier Co. wants to purchase a machine for $36,000 with a four year life and a $1,200 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $11,000 in each of the four years. What is the machine's net present value?