Stark Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.

If advertising expense of $140,000 is allocated on the basis of sales,the amount allocated to the Car Rental Department would be ________.(Do not round interim calculations.Round the final answer to the nearest whole dollar. )
A)$92,477.06
B)$47,522.94
C)$90,077.52
D)$88,421.05

Question

Stark Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.

If advertising expense of $140,000 is allocated on the basis of sales,the amount allocated to the Car Rental Department would be ________.(Do not round interim calculations.Round the final answer to the nearest whole dollar. )
A)$92,477.06 
B)$47,522.94 
C)$90,077.52 
D)$88,421.05

Quizplus · Accepted Answer

The amount allocated to the Car Rental Department
= $140,000 × [$720,000 ÷ ($720,000 + $370,000)] =$92,477.06

Stark Corporation Has Two Departments,Car Rental and Truck Rental