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A retail store has three operating departments ( Hardware , Clothes, and Home ) supported by two service departments ( Advertising and Purchasing ) .

A retail store has three operating departments (Hardware, Clothes, and Home) supported by two service departments (Advertising and Purchasing). Total Advertising expenses of $15,000 are allocated to the operating departments based on sales. Total Purchasing expenses of $17,000 are allocated to the operating departments based on purchase orders.
Department Purchase Orders Sales
Hardware 550 $ 115,000
Clothes 1,65070,000
Home 3,30065,000
Totals 5,500 $ 250,000

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