A retail store has three departments, A, B, and C, each of which has four full-time employees. The store does general advertising that benefits all departments. Advertising expense totaled $90,000 for the current year, and departmental sales were: Department A……………… $308,000Department B……………… 644,000Department C……………… 448,000Total sales………………….$1,400,000Calculate the amount of advertising expense that should be allocated to each department?
What will be an ideal response?
Percentage of total sales:
Department A $308,000/$1,400,000 = 22%
Department B $644,000/$1,400,000 = 46%
Department C $448,000/$1,400,000 = 32%
Advertising
| Dept. | Adv Exp. | % | Allocated |
| A | $ 90,000 | 22% | $19,800 |
| B | 90,000 | 46% | 41,400 |
| C | 90,000 | 32% | 28,800 |
| Total | ? | 100% | $90,000 |
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