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 $456,000 is allocated on the basis of sales,the cost per cost driver rate would be ________.
A)$0.60
B)$1.20
C)$0.40
D)$0.43

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 $456,000 is allocated on the basis of sales,the cost per cost driver rate would be ________.
A)$0.60 
B)$1.20 
C)$0.40 
D)$0.43

Quizplus · Accepted Answer

The cost per cost driver rate = $456,000 ÷ ($760,000 + $380,000)] = $0.40

Stark Corporation Has Two Departments,Car Rental and Truck Rental