If the gross sales for the computer department are $60,000 and the book department gross sales are $40,000, what is the allocation for advertising expense of $16,000 to these departments, based on gross sales?

Question

Quizplus · Accepted Answer

The total gross sales are $60,000 (computer) + $40,000 (book) = $100,000. The allocation for advertising expense based on gross sales would be in the same ratio as the sales: Computer department: ($60,000 / $100,000) * $16,000 = $9,600; Book department: ($40,000 / $100,000) * $16,000 = $6,400.

If the Gross Sales for the Computer Department Are $60,000