Answer:
Pepper Department Store
The total advertising expense allocated to Department B is:
= $24,000.
Explanation:
a) Data and Calculations:
Expense Basis for allocation Amount
Rent Square feet of floor space $ 49,000
Advertising Amount of dollar sales $ 80,000
Administrative Number of employees $ 120,000
Department Square Feet Dollar Sales Number of employees
A 5,500 $ 355,000 31
B 5,900 $ 375,000 33
C 6,100 $ 520,000 35
Totals 17,500 $ 1,250,000 99
Advertising Expense Allocation:
Department A = $22,720 (355,000/$1,250,000 * $80,000)
Department B = $24,000 ($375,000/$1,250,000 * $80,000)
Department C = $33,280 ($520,000/$1,250,000 * $80,000)
