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
Salaries$35,000
Depreciation 22,500
Advertising 47,500
Allocation Basis
Number of employees
Cost of goods sold
Net sales
Item Drilling Grinding Total
Number of employees 1,400 2,100 3,500
Net sales $333,125 $486,875 $820,000
Cost of goods sold $82,500 $137,500 $220,000
The amount of the office expenses that should be allocated to Grinding for the current period is:
A. $41,766
B. $105000
C. $63,266
D. $600,000
E. $51,016
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