Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

If the facility lease expense of $381,000 is allocated on the basis of vehicles in the fleet, the amount allocated to the Car Rental Department would be ________. (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $381,000
B) $249,226
C) $190,500
D) $249,382

Question

Stark Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

If the facility lease expense of $381,000 is allocated on the basis of vehicles in the fleet, the amount allocated to the Car Rental Department would be ________. (Do not round interim calculations. Round the final answer to the nearest whole dollar.)
A) $381,000 
B) $249,226 
C) $190,500 
D) $249,382

Quizplus · Accepted Answer

The amount allocated to the Car Rental Department
= $381,000 × [870 ÷ (870 + 460)] = $249,226

Stark Corporation Has Two Departments, Car Rental and Truck Rental