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27 August, 09:13

Calico Company has two operating departments: Department A and Department B. Department A occupies 30% of the floor space of the company but accounts for 75% of the sales of the company. Department B occupies 70% of the floor space of the company but accounts for 25% of company sales. Cleaning expense (an indirect expense of the company), which consists primarily of vacuuming the carpet is $30,000 each year. How much cleaning expense should be allocated to Department B? $0 $7,500 $9,000 $21,000 $22,500 $30,000 Slide 6 Slide 6

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  1. 27 August, 13:00
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    Answer: $21,000

    Step-by-step explanation:

    Cleaning expense is only related to the floor space occupied by the department.

    If the company spend a total of $30,00 on cleaning each year.

    And Department B occupies 70% of the company floor.

    Therefore, the company spends 70% of their cleaning expense on department B

    Hence, the cleaning expense on department B is given as;

    = 70% of $30,000

    = $21,000
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