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Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using
Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: Office Expenses Salaries Depreciation Advertising Allocation Basis Number of employees Total $48,000 24,000 47,000 Cost of goods sold Net sales Item Number of employees Net sales Cost of goods sold Drilling Grinding Total 1,200 1,800 3,000 $346,000 $519,000 $865,000 $102,600 $167,400 $270,000 The amount of the advertising cost that should be allocated to Drilling for the current period is: Multiple Choice $54,600. $346,000. $28,200. $78,000. $18,800
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