If all common costs are allocated using operating profit as the allocation basis,what is the total cost allocated to Division B?
A)$457,286
B)$512,714
C)$555,000
D)$1,087,576

Question

Quizplus · Accepted Answer

Division B's operating profit is $512,714, which is 47.14% of the total operating profit of $1,087,576. Therefore, Division B should be allocated 47.14% of the total common costs of $1,087,576, which is $512,714.

If All Common Costs Are Allocated Using Operating Profit as the Allocation