Answer the following questions using the information below:
Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.
$\begin{array}{lrr}&\text { Car Rental }&\text { Truck Rental }\
\text { Number of Vehicles in fleet } & 850 & 430 \
\text { Number of employees } & 125 & 75 \
\text { Sales } & \$ 750,000 & \$ 375,000
\end{array}$
-If advertising expense of $125,000 is allocated on the basis of sales,the amount allocated to the Car Rental Department would be ________.
A) $83,333.33
B) $87,777.67
C) $86,666.67
D) $85,467.33

Question

Answer the following questions using the information below:
Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.
 $\begin{array}{lrr}&\text { Car Rental }&\text { Truck Rental }\
\text { Number of Vehicles in fleet } & 850 & 430 \
\text { Number of employees } & 125 & 75 \
\text { Sales } & \$ 750,000 & \$ 375,000
\end{array}$
-If advertising expense of $125,000 is allocated on the basis of sales,the amount allocated to the Car Rental Department would be ________.
A) $83,333.33
B) $87,777.67
C) $86,666.67
D) $85,467.33

Quizplus · Accepted Answer

Advertising expense is allocated on the basis of sales. The Car Rental Department's sales are $750,000, and the Truck Rental Department's sales are $375,000. Therefore, the Car Rental Department's share of the advertising expense is $125,000 * $750,000 / ($750,000 + $375,000) = $83,333.33.

Answer the Following Questions Using the Information Below: Stark Corporation

Answer the Following Questions Using the Information Below:
Stark Corporation