If the gross sales for the computer department are $3,700 and the book department gross sales are $6,300,what is the allocation for advertising expense of $750 to these departments,based on gross sales?

Question

Quizplus · Accepted Answer

First, we need to determine the total gross sales of the two departments:

Total gross sales = computer department gross sales + book department gross sales 
Total gross sales = $3,700 + $6,300 
Total gross sales = $10,000

Next, we need to calculate the percentage allocation of advertising expense for each department:

Computer department percentage = computer department gross sales / total gross sales 
Computer department percentage = $3,700 / $10,000 
Computer department percentage = 0.37 or 37%

Book department percentage = book department gross sales / total gross sales 
Book department percentage = $6,300 / $10,000 
Book department percentage = 0.63 or 63%

Finally, we can allocate the advertising expense based on these percentages:

Computer department allocation = computer department percentage * advertising expense 
Computer department allocation = 0.37 * $750 
Computer department allocation = $277.50

Book department allocation = book department percentage * advertising expense 
Book department allocation = 0.63 * $750 
Book department allocation = $472.50

Therefore, the correct answer is C.

If the Gross Sales for the Computer Department Are $3,700