Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two operating departments using different allocation bases. The following information is available for the current period: Office Expenses Salaries Total Allocation Basis Number of employees $ 40,000 Depreciation Advertising 26,000 60,000 Cost of goods sold Percentage of total sales Department Number of employees Drilling Grinding 1,800 2,700 Sales $ 352,000 528,000 Cost of goods sold $ 110,200 179,800 Total 4,500 $ 880,000 $ 290,000 The amount of the advertising cost that should be allocated to Grinding 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 operating departments using different allocation bases. The following information is available for the current period: Office Expenses Salaries Total Allocation Basis Number of employees $ 40,000 Depreciation Advertising 26,000 60,000 Cost of goods sold Percentage of total sales Department Number of employees Drilling Grinding 1,800 2,700 Sales $ 352,000 528,000 Cost of goods sold $ 110,200 179,800 Total 4,500 $ 880,000 $ 290,000 The amount of the advertising cost that should be allocated to Grinding for the current period is:
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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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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![Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses
are allocated to the two operating departments using different allocation bases. The following information is available for the
current period:
Office Expenses
Salaries
Total
Allocation Basis
Number of employees
$ 40,000
Depreciation
Advertising
26,000
60,000
Cost of goods sold
Percentage of total sales
Department
Number of employees
Drilling
Grinding
1,800
2,700
Sales
$ 352,000
528,000
Cost of goods sold
$ 110,200
179,800
Total
4,500
$ 880,000
$ 290,000
The amount of the advertising cost that should be allocated to Grinding for the current period is:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F16180ce2-c951-49f8-aaca-2b86870d459c%2F557eb81c-8703-4673-a898-c8a644bc2501%2Fhhs6htd_processed.png&w=3840&q=75)
Transcribed Image Text:Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses
are allocated to the two operating departments using different allocation bases. The following information is available for the
current period:
Office Expenses
Salaries
Total
Allocation Basis
Number of employees
$ 40,000
Depreciation
Advertising
26,000
60,000
Cost of goods sold
Percentage of total sales
Department
Number of employees
Drilling
Grinding
1,800
2,700
Sales
$ 352,000
528,000
Cost of goods sold
$ 110,200
179,800
Total
4,500
$ 880,000
$ 290,000
The amount of the advertising cost that should be allocated to Grinding for the current period is:
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