Todweed Academy allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools:$\begin{array}{ccccc}
& \text { Lower } & \text { Middle } & \text { Upper } \
{\text { School }} & \text { School } & \text { School } & \text { School } & \text { Total } \
\text { Tuition revenue } & \$ 1,000,000 & \$ 800,000 & \$ 1,200,000 & \$ 3,000,000\\text { Marketing and }\
\text { administrative }&&&&\$1,200,000
\end{array}$Using revenue as an allocation base, the amount of costs allocated to the Lower School is calculated to be:

Question

Todweed Academy allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools:$\begin{array}{ccccc} 
& \text { Lower } & \text { Middle } & \text { Upper } \
{\text { School }} & \text { School } & \text { School } & \text { School } & \text { Total } \
\text { Tuition revenue } & \$ 1,000,000 & \$ 800,000 & \$ 1,200,000 & \$ 3,000,000\\text { Marketing and }\
\text { administrative }&&&&\$1,200,000
\end{array}$Using revenue as an allocation base, the amount of costs allocated to the Lower School is calculated to be:

Quizplus · Accepted Answer

The Lower School's share of the total tuition revenue is $1,000,000 out of a total of $3,000,000, which is 1/3 or 33.33%. Applying this percentage to the total marketing and administrative costs of $1,200,000 gives $1,200,000 * 1/3 = $400,000.

Todweed Academy Allocates Marketing and Administrative Costs to Its Three