1a)

1b)

Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising costs are $148,000 this year, and departmental sales for this year follow. Department 1 2 3 Sales $ 228,000 357,200 174,800 How much advertising cost is allocated to each department if the allocation is based on departmental sales? Department Sales % of Total Advertising to Allocate Allocated Amount 1 % 2 % 3 % Total % A retailer pays $160,000 rent each year for its two-story building. The space in this building is occupied by five departments as specified here. Department Jewelry Cosmetics Housewares Tools Shoes Square feet occupied 1,920 (first-floor) 2,880 (first-floor) 2,016 (second-floor) 960 (second-floor) 1,824 (second-floor) The company allocates 60% of total rent expense to the first floor and 40% to the second floor, and then allocates rent expense for each floor to the departments occupying that floor on the basis of space occupied. Determine the rent expense to be allocated to each department. Step 1: Allocate total rent expense between the two floors. Amount Allocated % of Total Cost First floor % Second floor % Totals % Step 2: Allocate these portions of total rent expense across the departments occupying each floor. First Floor % of Total Cost Jewelry Dept. % Cosmetics Dept. % Sq. Feet Totals % Sq. Feet % of Total Cost % Second Floor Housewares Dept. Tools Dept. Shoes Dept. % % Totals %