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 expen 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 Depreciation 20,000 Cost of goods sold Advertising $30,000 Number of employees 40,000 Net sales Drilling Grindin total Item Number of employees Net sales 1,000 1,500 2,500 325,000 $475,000 $800,000 Cost of goods sold 75,000 $125,000 $200,000 The amount of salaries that should be allocated to Grinding for the current period is:

Explanation / Answer

Total Salaries = $ 30000

Allocation to Grinding = 30000 * 1500 / 2500

= $ 18000

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