2.

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

Office Expenses	Total	Allocation Basis
Salaries	$ 43,000	Number of employees
Depreciation	32,000	Cost of goods sold
Advertising	70,000	Percentage of total sales

Department	Number of employees	Sales	Cost of goods sold
Drilling	1,400	$ 380,000	$ 133,000
Grinding	2,100	570,000	217,000
Total	3,500	$ 950,000	$ 350,000

5.

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $123,600, and the following quantities of product and sales revenues were produced.

Product	Sales Value
Feed	$ 72,100
Flour	113,300
Starch	20,600
Total	$ 206,000

How much of the $123,600 cost should be allocated to flour if the value basis is used?

9

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

Office Expenses	Total	Allocation Basis
Salaries	$ 45,000	Number of employees
Depreciation	31,000	Cost of goods sold
Advertising	65,000	Percentage of total sales

Department	Number of employees	Sales	Cost of goods sold
Drilling	1,000	$ 376,000	$ 129,200
Grinding	1,500	564,000	210,800
Total	2,500	$ 940,000	$ 340,000

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

10.

Kragle Corporation reported the following financial data for one of its divisions for the year; average assets of $550,000; sales of $1,010,000; and income of $121,200. The investment center profit margin is:

13.

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating 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	22,000	Cost of goods sold
Advertising	45,000	Percentage of total sales

Department	Number of employees	Sales	Cost of goods sold
Drilling	1,200	$ 340,000	$ 95,000
Grinding	1,800	510,000	155,000
Total	3,000	$ 850,000	$ 250,000

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

15.

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $250,000, and the following quantities of product and sales revenues were produced.

Product	Sales Value
Feed	$ 120,000
Flour	108,100
Starch	68,000
Total	$ 296,100

How much of the $250,000 cost should be allocated to feed if the value basis is used? The amount of the advertising cost that should be allocated to Drilling for the current period is:

19.

A company has sales of $119,000; cost of goods sold of $74,870; and total direct expenses of $8,620. The department contribution to overhead is