Answer:
$11,400
Explanation:
The expenses are allocated to different department based on different suitable allocation basis. These basis are also known as the cost drivers.
As per given information
Office Expenses Total Allocation Basis
Salaries $42,000 Number of employees
Depreciation $30,000 Cost of goods sold
Advertising $64,000 Net sales
Item Drilling Grinding Total
Number of employees 1,200 1,800 3,000
Net sales $370,000 $555,000 $925,000
Cost of goods sold $125,400 $204,600 $330,000
Depreciation is allocated to department based on the cost of goods sold by each department.
Depreciation expense allocation
To drilling department = Depreciation expense x Cost of goods sold ratio = $30,000 x $125,400 / $330,000 = $11,400
