Marcus Company has two service departments: Office and Purchasing. Total expenses for the Office is $66,000 and for Purchasing is $86,000. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders.

Department	Sales	Purchase Orders
Books	$ 1,089,000	1,806
Magazines	435,600	1,260
Newspapers	455,400	1,134
Totals	$ 1,980,000	4,200

Expenses allocated from the Office Department to the companys Magazines Department are:

Multiple Choice

• $18,920.

• $33,440.

• $14,520.

• $36,300.

• $15,180.

A company processed raw milk for $320,000. This raw milk can be converted into the following types of milk with listed sales values:

Joint Products	Sales Value
Whole milk	$ 70,200
2% milk	111,800
Skim milk	98,000
Total	$ 280,000

Using the value basis, the total cost allocated to skim milk is:

Multiple Choice

• $80,229.

• $112,000.

• $113,769.

• $127,771.

• $49,000.

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	28,000	Cost of goods sold
Advertising	62,000	Percentage of total sales

Department	Number of employees	Sales	Cost of goods sold
Drilling	1,600	$ 366,000	$ 117,800
Grinding	2,400	549,000	192,200
Total	4,000	$ 915,000	$ 310,000

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

Multiple Choice

• $24,800.

• $37,200.

• $366,000.

• $85,400.

• $69,800.