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:

Senior Leaders

Senior leaders refer to the highest-ranking executives in an organization, responsible for strategic decision-making and guiding the company's direction.

Diversity Competency

Refers to the ability to interact effectively with people of different backgrounds and cultures.

Moral Imperative

A principle or obligation that compels individuals to act according to ethical standards.

Business Priority

The ranking or importance of tasks, goals, or objectives within a business to guide decision-making and resource allocation.