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2 answers:
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Answer:
b. gross margin would be $4,000.
Explanation:
Distribution costs are considered when calculating gross margin.
Gross margin is given by sales subtracted by the cost of goods sold:
The gross margin would be $4,000.
Although the freight cost should be included when calculating net income, more administrative costs could be added and, thus, net income cannot be determined with the given information.
Cost allocation is a technique of allocating the organization's costs among the various cost centers of the organization. Thus, the office costs allocated to the Bottling department are equal to $128,000.
<h3>What are allocation costs?</h3>Cost allocation is a technique of supplying relief to shared carrier organization's cost facilities that offer a product or provider. In turn, the related cost is assigned to internal clients' price centers that devour the goods and services.
As per the given information,
Total office costs: $320,000
We have given total number of employees for mixing = 600
And total number of employees for bottling = 400
office costs = $320,000
So total number of employees is equal to 600 plus 400 is 1000 employees.
Thus, the office costs allocated to the Bottling department is equal to $128,000.
Learn more about allocation costs here:
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