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Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis
Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments:
Expense | Basis for allocation | Amount |
Rent | Square feet of floor space | $24,000 |
Advertising | Amount of dollar sales | $30,000 |
Administrative | Number of employees | $45,000 |
The following information is available for its three operating (sales) departments:
Department | Square Feet | Dollar Sales | Number of employees |
A | 3,000 | $280,000 | 6 |
B | 3,400 | $300,000 | 8 |
C | 3,600 | $420,000 | 10 |
Totals | 10,000 | $1,000,000 | 24 |
What is the total advertising expense allocated to Department C?
$30,000. | ||
$9,000. | ||
$12,500. | ||
$10,800. | ||
$7,500. |
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