Wadsworth Distribution Company has total advertising expenses of $84,000: $32,000 for radio and $52,000 for print advertising. The expense for print advertising is allocated to Department A and Department B based on the total of net sales represented by each department. The total net sales for Wadsworth Distribution Company is $744,000. The net sales generated are $558,000 and $186,000 for Department A and B, respectively. How much of the expense for print advertising should be allocated to Department A?

Question

Quizplus · Accepted Answer

The allocation is based on the proportion of net sales. Department A's sales are $558,000 out of a total of $744,000. The print advertising expense is $52,000. The allocation for Department A is ($558,000 / $744,000) * $52,000 = $39,000.

Wadsworth Distribution Company Has Total Advertising Expenses of $84,000: $32,000