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 $ 50,000 Number of employees Depreciation Advertising 34,000 Cost of goods sold 68,000 Net sales Drilling Grinding 1,800 $388,000 $582,000 $970, 000 $140,600 $229,400 $370, 000 Item Total Number of employees 2,700 4,500 Net sales Cost of goods sold The amount of the total office expenses that should be allocated to Drilling for the current period is:
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 $ 50,000 Number of employees Depreciation Advertising 34,000 Cost of goods sold 68,000 Net sales Drilling Grinding 1,800 $388,000 $582,000 $970, 000 $140,600 $229,400 $370, 000 Item Total Number of employees 2,700 4,500 Net sales Cost of goods sold The amount of the total office expenses that should be allocated to Drilling for the current period is:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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