Julia Company allocates its indirect advertising expenses based on each department's gross sales.If the men's apparel department has gross sales of $200,000 out of a total of $2,000,000 in gross sales,what fraction would Julia use to allocate its indirect advertising expenses?

Question

Quizplus · Accepted Answer

To find the fraction of indirect advertising expenses allocated to the men's apparel department, we need to divide the gross sales of the men's apparel department by the total gross sales of all departments.

Fraction = Men's Apparel Gross Sales / Total Gross Sales 
Fraction = $200,000 / $2,000,000 
Fraction = 1/10

Therefore, Julia would allocate 1/10 or 0.1 of its indirect advertising expenses to the men's apparel department. The answer is B.

Julia Company Allocates Its Indirect Advertising Expenses Based on Each