Ito Auto Company incurred $5,000 of indirect advertising costs for its operations.The following data have been collected for the current year for its three departments:
$\begin{array}{lrrr}
&\underline{\text {New Cars}}&
\underline{\text {Used Cars}}& \underline{\text {Parts and Service}}\
\text { Sales } & \$ 50,000 & \$ 35,000 & \$ 15,000 \
\text { Direct advertising costs } & \$ 2,500 & \$ 2,000 & \$ 500 \
\text { Newspaper ad space } & 60 \% & 35 \% & 5 \%
\end{array}$
Determine the costs assigned to each department using the following activity drivers:
a.Sales
b.Direct advertising costs
c.Newspaper ad space

Question

Ito Auto Company incurred $5,000 of indirect advertising costs for its operations.The following data have been collected for the current year for its three departments:
 $\begin{array}{lrrr}
 &\underline{\text {New Cars}}&
\underline{\text {Used Cars}}& \underline{\text {Parts and Service}}\
\text { Sales } & \$ 50,000 & \$ 35,000 & \$ 15,000 \
\text { Direct advertising costs } & \$ 2,500 & \$ 2,000 & \$ 500 \
\text { Newspaper ad space } & 60 \% & 35 \% & 5 \%
\end{array}$
 Determine the costs assigned to each department using the following activity drivers: 
a.Sales
b.Direct advertising costs
c.Newspaper ad space

Quizplus · Accepted Answer

The Answer of Ito Auto Company incurred $5,000 of indirect advertising costs for its operations.The following data have been collected for the current year for its three departments:
 $\begin{array}{lrrr}
 &\underline{\text {New Cars}}&
\underline{\text {Used Cars}}& \underline{\text {Parts and Service}}\
\text { Sales } & \$ 50,000 & \$ 35,000 & \$ 15,000 \
\text { Direct advertising costs } & \$ 2,500 & \$ 2,000 & \$ 500 \
\text { Newspaper ad space } & 60 \% & 35 \% & 5 \%
\end{array}$
 Determine the costs assigned to each department using the following activity drivers: 
a.Sales
b.Direct advertising costs
c.Newspaper ad space

Ito Auto Company Incurred $5,000 of Indirect Advertising Costs for Its