Wilson Company Has Two Departments, Arrive and Go Total Advertising Expense Is $300,000

question 109

Multiple Choice

Wilson Company has two departments, Arrive and Go.Relevant information is presented below: $\begin{array} { l l l } &\text { Arrive } & \text { Go }\\\text { Budgeted Sales } & \$ 400,000 & \$ 2,000,000 \\ \text { Actual Sales } & \$ 300,000 & \$ 2,100,000 \end{array}$ Total advertising expense is $300,000.If the allocation base is changed from budgeted sales to actual sales, the amount allocated to the Arrive Department will _____.

• A)increase by $12,500
• B)decrease by $12,500
• C)increase by $25,000
• D)decrease by $25,000

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Definitions:

Borrow

The act of getting something from someone with the intention of returning it or its equivalent.

Reserves

Funds or assets set aside by individuals, institutions, or governments to meet future liabilities, emergencies, or regulatory requirements.

Reserve Ratio

A requirement set by central banks determining the minimum amount of reserves a bank must hold against deposits, influencing the bank's capacity to lend and create money.

Required Reserves

The minimum amount of funds that a bank or financial institution must hold in reserve, as mandated by a central bank or regulatory authority, to ensure financial stability and liquidity.