Fulton Company
Fulton Company is placing an ad in the local paper to advertise its products.The ad will run for one week at a total cost of $5,500.Fulton Company has four categories of products as follows:
% of floor space Expected sales
$\text {\underline{ occupied.} }$ $\text {\underline{ value} }$
$\begin{array}{lcl}
\text { Harchware } & 20 \% & \$ 35,000 \
\text { Hand Tools } & 15 & 15,000 \
\text { Lawn Fumiture } & 45 & 64,500 \
\text { Light Fixtures } & 20 & 25,500
\end{array}$

Refer to Fulton Company.Assume that Fulton decides to allocate based on expected sales value.What amount of advertising cost should be allocated to light fixtures (round to the nearest dollar)?
A)$1,375
B)$589
C)$1,002
D)$2,534

Question

Fulton Company
Fulton Company is placing an ad in the local paper to advertise its products.The ad will run for one week at a total cost of $5,500.Fulton Company has four categories of products as follows:
                                % of floor space  Expected sales
                                    $\text {\underline{ occupied.} }$   $\text {\underline{ value} }$
$\begin{array}{lcl}
\text { Harchware } & 20 \% & \$ 35,000 \
\text { Hand Tools } & 15 & 15,000 \
\text { Lawn Fumiture } & 45 & 64,500 \
\text { Light Fixtures } & 20 & 25,500
\end{array}$

Refer to Fulton Company.Assume that Fulton decides to allocate based on expected sales value.What amount of advertising cost should be allocated to light fixtures (round to the nearest dollar)?
A)$1,375
B)$589
C)$1,002
D)$2,534

Quizplus · Accepted Answer

We need to allocate the advertising cost based on the expected sales value.

The total expected sales value for all four categories of products is:

$35,000 + $15,000 + $64,500 + $25,500 = $140,000

The percentage of the total expected sales value for each category is:

Hardware: $35,000 / $140,000 = 0.25 = 25% 
Hand Tools: $15,000 / $140,000 = 0.107 = 10.7% 
Lawn Furniture: $64,500 / $140,000 = 0.461 = 46.1% 
Light Fixtures: $25,500 / $140,000 = 0.182 = 18.2%

Therefore, the amount of advertising cost allocated to light fixtures is:

$5,500 * 0.182 = $1,001.90

Rounded to the nearest dollar, the answer is $1,002.

So, the correct answer is C.

Fulton Company Fulton Company Is Placing an Ad in the Local

Fulton Company
Fulton Company Is Placing an Ad in the Local