Dartmouth Building Products Inc. provides the following information.
Corporate advertising costs = $860,000
Division A - $4,900,000
Division B - $19,600,000
Number of ads run on Division A products 600
Number of ads run on Division B products 4400
Assume that customers with higher revenues benefited more from corporate advertising costs than customers with lower revenues. What is the allocated corporate costs for Division B?
A) $756,800
B) $215,000
C) $688,000
D) $172,000

Question

Quizplus · Accepted Answer

Allocated corporate cost for Division B = $19,600,000 / ($4,900,000 + $19,600,000) × $860,000 = $688,000

Dartmouth Building Products Inc. Provides the Following Information