Advertising expense totaled $70,000. If indirect advertising costs are allocated based on gross sales per department, what amount would be allocated to the Jewelry department if $10,000 of advertising is indirect? (Round any percentages two decimal places, X.XX%, and round your final answer to the nearest dollar.) Gross Sales: Jewelry, $50,000; Glassware, $40,000; Watches, $10,000.

Question

Quizplus · Accepted Answer

The total gross sales are $50,000 (Jewelry) + $40,000 (Glassware) + $10,000 (Watches) = $100,000. The Jewelry department's share of gross sales is $50,000 / $100,000 = 50%. Therefore, the Jewelry department should be allocated 50% of the $10,000 indirect advertising costs, which is $5,000.

Advertising Expense Totaled $70,000