5.)

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	$ 48,000	Number of employees
Depreciation	24,000	Cost of goods sold
Advertising	47,000	Percentage of total sales

Department	Number of employees	Sales	Cost of goods sold
Drilling	1,200	$ 346,000	$ 102,600
Grinding	1,800	519,000	167,400
Total	3,000	$ 865,000	$ 270,000

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

• $18,800.

• $54,600.

• $28,200.

• $346,000.

• $78,000.

6.)

Wren Pork Company uses the value basis method of allocating joint costs in its production of pork products. Relevant information for the current period follows:

Product	Sales Value
Loin chops	$13,500
Ground	18,000
Ribs	17,250
Bacon	26,250
Total	$75,000

The total joint cost for the current period was $60,000. How much of this cost should Wren Pork allocate to Loin chops?

• $0.

• $14,400.

• $10,800.

• $21,000.

• $60,000.

8.) CakeCo, Incorporated has three operating departments. Information about these departments is listed below. Maintenance is service department at CakeCo that incurred $14,700 of costs during the period. If allocated maintenance cost is based on floor space occupied by each of the operating departments, compute the amount of maintenance cost allocated to the Baking Department.

Department	Direct Expenses	Square Feet
Mixing	$ 25,000	1,400
Baking	19,000	2,100
Packaging	13,000	700

• $350.

• $1,050.

• $5,600.

• $9,450.

• $7,350.