Silver Chariots Trucking Company Incurred $5,000 of Indirect Advertising Costs

question 119

Essay

Silver Chariots Trucking Company incurred $5,000 of indirect advertising costs for its operations. The following data have been collected for 2018 for its three departments: $\begin{array}{lrrr}&&&\text { Partsand }\\&\text { New Trucks} &\text { Used Trucks }&\text { Service }\\\text { Sales } & \$ 50,000 & \$ 35,000 & \$ 15,000 \\\text { Direct advertising costs } & \$ 2,500 & \$ 2,000 & \$ 500 \\\text { Newspaper ad space } & 60 \% & 35 \% & 5 \%\end{array}$
Required:
Determine the costs assigned to each department using the following activity drivers:
a.Sales
b.Direct advertising costs
c.Newspaper ad space

---

Definitions:

Social Clock

A timetable based on social norms for age-related life events such as occupational entry, marriage, parenthood, and retirement.

Normative Life Events

Typical or expected milestones and experiences that occur in an individual's life, such as starting school, marriage, or retirement.

Residency

The period of specialized medical training that a doctor undergoes after completing medical school, or the act of living in a particular place.

Development

The processes by which individuals grow and change, as well as the ways in which they stay the same over time.