Marks Corporation has two operating departments, Drilling and Grinding, and an o

Question

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 alaries Depreciation Advertising $45,000 31,000 65,800 Allocation Basis Number of employees Cost of goods sold Net sales Item Number of employees Net sales Cost of goods sold Drilling Grinding Total 2,500 376,000 $564,000 $940,000 129,200 $210,800 $340,000 1,000 1,500

Explanation / Answer

Allocation of salary = Salary/No of employee

                                = 45000/2500

Allocation of salary = 18 per employee

Salary allocation of grinding = 1500*18 = 27000

so answer is d) 27000

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