Joyful Praises Corporation has total advertising expenses of $84,000: $32,000 for radio advertising and $52,000 for print advertising.The print advertising is allocated to Departments A and B based on net sales generated in each department.Department A has net sales of $558,000 and Department B has net sales of $186,000.How much of the print advertising should be allocated to Department A?

Question

Quizplus · Accepted Answer

To allocate the print advertising expenses, we need to find the percentage of net sales generated by each department.

Department A's percentage of net sales = (Department A's net sales / Total net sales) = 558,000 / (558,000 + 186,000) = 75%

Department B's percentage of net sales = (Department B's net sales / Total net sales) = 186,000 / (558,000 + 186,000) = 25%

Next, we need to use these percentages to allocate the print advertising expenses:

Print advertising expense allocated to Department A = 52,000 x 75% = $39,000

Therefore, the answer is B, $39,000 should be allocated to Department A.

Joyful Praises Corporation Has Total Advertising Expenses of $84,000: $32,000