No standard rule identifies the best basis of allocating expenses across departments.

True or False

Marcus Company has two service departments: Office and Purchasing. Total expenses for the Office is $48,000 and for Purchasing is $68,000. Expenses for the Office are allocated to operating departments based on sales. Expenses for Purchasing are allocated to operating departments based on purchase orders.

Department	Sales	Purchase Orders
Books	$ 990,000	1,032
Magazines	396,000	720
Newspapers	414,000	648
Totals	$ 1,800,000	2,400

Expenses allocated from the Purchasing department to the companys Newspaper department are:

Multiple Choice

• $31,320.

• $12,960.

• $29,240.

• $18,360.

• $20,400.