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 | $ | 45,000 | Number of employees | ||||||||
| Depreciation | 31,000 | Cost of goods sold | |||||||||
| Advertising | 65,000 | Net sales | |||||||||
| Item | Drilling | Grinding | Total | ||||||
| Number of employees | 1,000 | 1,500 | 2,500 | ||||||
| Net sales | $ | 376,000 | $ | 564,000 | $ | 940,000 | |||
| Cost of goods sold | $ | 129,200 | $ | 210,800 | $ | 340,000 | |||
| The amount of depreciation that should be allocated to Drilling for the current period is: | |||||||||
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
