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Doug Dandy Auto Sales uses different media to advertise its products (television, radio, newspaper, Internet, and so on). At the end of 2019, the
Doug Dandy Auto Sales uses different media to advertise its products (television, radio, newspaper, Internet, and so on). At the end of 2019, the company president, Doug Dougherty, decided that corporate headquarters would negotiate and pay for all advertising costs and allocate these costs to each of the company's four sales locations based on number of vehicles sold. (Click the icon to view the advertising information.) The managers had already drawn up their advertising plans for 2020 so the corporate plan would do the same advertising for them as they had planned. Dougherty budgeted $1.5 million of total advertising cost for 2020, which was also the actual advertising costs in 2020. Advertising Costs in 2020 if Divisions Had Bought the Advertising Sales Location Actual Number of Cars Sold in 2020 East 2,380 $ West 770 North 1,680 2,170 South 7,000 Total 436,000 501,400 588,600 654,000 2,180,000 The manager of the East sales location, Tim Sneed, was not happy. He complained that the new allocation method was unfair and increased his advertising costs significantly. The East location sold high volumes of low-priced used cars and most of the corporate advertising budget related to new car sales. Requirement 1. Show the amount of the 2020 advertising cost ($1,500,000) that would be allocated to each of the divisions under the following criteria: (a) Dougherty's allocation method based on actual number of cars sold, (b) the stand-alone method based on the amounts divisions would have spent on their own advertising, (c) the incremental-allocation method, with divisions ranked on the basis of dollars they would have spent on advertising in 2020. (Do not round intermediary calculations. Round the final answer to the nearest whole dollar. Enter a "0" for amount with a zero values.) (a.) Sales Location East West North South Cost Allocated
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