Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

-If advertising expense of $112,500 is allocated on the basis of sales, the amount allocated to the Truck Rental Department would be:
A)$56,250
B)$62,500
C)$37,500
D)$87,500

Question

Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.
 
-If advertising expense of $112,500 is allocated on the basis of sales, the amount allocated to the Truck Rental Department would be:
A)$56,250 
B)$62,500 
C)$37,500 
D)$87,500

Quizplus · Accepted Answer

The allocation of advertising expense is based on sales. If the Truck Rental Department's sales are one-third of the total sales, then one-third of $112,500 is $37,500.

Answer the Following Questions Using the Information Below