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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:

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The amount of the total office expenses that should be allocated to Drilling for the current period is:

Multiple Choice

  • $35,840.

  • $54,400.

  • $65,100.

  • $99,000.

  • $600,000.

Office Expenses Salaries Depreciation Advertising Total $ 33,000 23,000 43,000 Allocation Basis Number of employees Cost of goods sold Net sales Item Number of employees Net sales Cost of goods sold Drilling Grinding Total 750 1,750 2,500 $332,000 $498,000 $830,000 $ 87,400 $142,600 $230,000

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