Answer the following questions using the information below:
Trustme Vehicle Rental Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.
$$\begin{array} { l r r }
& \text { Car Rental } & \text { Truck Rental } \
\text { Number of vehicles in fleet } & 700 & 300 \
\text { Number of employees } & 150 & 50 \
\text { Sales } & \$ 1500000 & \$ 750000
\end{array}$$
-If an advertising expense of $225 000 is allocated on the basis of sales,the amount allocated to the Truck Rental Department would be:
A)$125 000
B)$112 500
C)$75 000
D)$175 000

Question

Answer the following questions using the information below:
Trustme Vehicle Rental Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.
 $$\begin{array} { l r r } 
& \text { Car Rental } & \text { Truck Rental } \
\text { Number of vehicles in fleet } & 700 & 300 \
\text { Number of employees } & 150 & 50 \
\text { Sales } & \$ 1500000 & \$ 750000
\end{array}$$
-If an advertising expense of $225 000 is allocated on the basis of sales,the amount allocated to the Truck Rental Department would be:
A)$125 000
B)$112 500
C)$75 000
D)$175 000

Quizplus · Accepted Answer

The advertising expense is allocated based on sales. The Truck Rental Department's sales are $750,000 out of a total of $2,250,000 ($1,500,000 + $750,000). Therefore, the allocation is $225,000 * ($750,000 / $2,250,000) = $75,000.

Answer the Following Questions Using the Information Below: Trustme Vehicle

Answer the Following Questions Using the Information Below:
Trustme Vehicle