Question
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 Total Allocation Basis Salaries $ 31,000 Number of employees Depreciation 21,000 Cost of goods sold Advertising 41,000 Net sales
Item Drilling Grinding Total Number of employees 800 1,200 2,000 Net sales $ 330,000 $ 495,000 $ 825,000 Cost of goods sold $ 79,800 $ 130,200 $ 210,000
The amount of the advertising cost that should be allocated to Drilling for the current period is:
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