Pepper department store allocates its service department


Problem

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 $37,000 Advertising Amount of dollar sales $56,000 Administrative Number of employees $84,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Number of employees A 4,300 $319,000 19 B 4,700 $339,000 21 C 4,900 $472,000 23 Totals 13,900 $1,130,000 63. What is the total advertising expense allocated to Department C?

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Accounting Basics: Pepper department store allocates its service department
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