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 ExpensesTotal Allocation BasisSalaries$30,000 Number of employeesDepreciation 20,000 Cost of goods soldAdvertising 40,000 Net sales ItemDrilling Grinding TotalNumber 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 The amount of depreciation that should be allocated to Drilling for the current period is:
A. $7,500.
B. $25,000.
C. $40,000.
D. $20,000.
E. $12,500.
Answer: A
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