Smart Choices Allocates Advertising Expenses to Its Two Departments, Lifestyle

question 22

Multiple Choice

Smart Choices allocates advertising expenses to its two departments, Lifestyle and Storage Solutions, using sales as the cost driver. For the current year the sales for Lifestyle are estimated to be $450,000 and for department Storage Solutions $900,000 and total advertising expenses are budgeted at $110,000. The indirect cost rate is:

• A) Lifestyle: $0.24 per sales dollar: Storage Solutions: $0.12 per sales dollar
• B) $.036 per sales dollar
• C) $.081 per sales dollar
• D) $12.27 per sales dollar

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Definitions:

Corpus Callosum

The thick bundle of nerve fibers that connects the left and right hemispheres of the brain.

Myelination

The process of forming a myelin sheath around nerves to increase the speed at which impulses propagate.

Visual Information

Data or knowledge received and processed by the visual system, usually pertaining to the sense of sight and visual perception.

Preoperational Children

A stage in Jean Piaget's theory of cognitive development, usually from ages 2 to 7, where children are beginning to engage in symbolic play but are not yet capable of logical thought.