Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses Total Allocation Basis

Salaries $ 30,000 Number of employees

Depreciation 20,000 Cost of goods sold

Advertising 40,000 Net sales

Item Drilling Grinding Total

Number of employees 1,000 1,500 2,500

Net sales $ 325,000 $ 475,000 $ 800,000

Cost of goods sold $ 75,000 $ 125,000 $ 200,000

a. The amount of salaries that should be allocated to Grinding for the current period is:

Multiple Choice:

1. $30,000.

2. $18,000.

3. $15,000.

4. $10,000.

5. $12,500.

Question

Business

Hurst

18 October, 07:58

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period:

Office Expenses Total Allocation Basis

Salaries $ 30,000 Number of employees

Depreciation 20,000 Cost of goods sold

Advertising 40,000 Net sales

Item Drilling Grinding Total

Number of employees 1,000 1,500 2,500

Net sales $ 325,000 $ 475,000 $ 800,000

Cost of goods sold $ 75,000 $ 125,000 $ 200,000

a. The amount of salaries that should be allocated to Grinding for the current period is:

Multiple Choice:

1. $30,000.

2. $18,000.

3. $15,000.

4. $10,000.

5. $12,500.

+1

Answers (1)

Know the Answer?

Angel Wells · Answer 1

2. $18,000

Explanation:

The computation of the amount of salaries allocated to grinding is shown below:

= Total salaries * grinding number of employees : total number of employees

= $30,000 * 1,500 employees : 2,500 employees

= $18,000

Simply we find out the allocated amount based on the number of employees

All other information which is given is not relevant. Hence, ignored it