Question

The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be: Multiple Choice An equal amount of cost for each department. Number of customers to enter each department. Floor space of each department. Relative number of items each department had on sale. Proportion of sales of each department.

Answer 1

Answer:

Proportion of sales of each department.

Explanation:

Advertising expense directly effects the sales of the business. As the campaign is made store-wide sales and it does not directly traceable to any specific department. It need proper basis for allocation of expenses. The proportion of sales of each department is the most suitable basis from all of the given options because the share of benefit from the campaign is received in the form of sale. A campaign might mostly effects the sales.