If the Gross Sales for the Computer Department Are $60,000

question 26

Multiple Choice

If the gross sales for the computer department are $60,000 and the book department gross sales are $40,000, what is the allocation for advertising expense of $16,000 to these departments, based on gross sales?

• A) Computer department $9,600; book department $6,400
• B) Computer department $8,000; book department $8,000
• C) Computer department $6,400; book department $9,600
• D) Computer department $60,000; book department $40,000

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Definitions:

Economically Inefficient

A condition where resources are not utilized in the best possible manner, leading to potential waste or losses in terms of welfare or output.

Average Total Cost

The total cost of production divided by the total quantity produced, representing the per-unit cost of production.

Marginal Cost

Refers to the increase in total production costs resulting from the production of one additional unit of a good or service.

Single-Price

A pricing strategy where a product is sold at the same price to all customers under similar conditions.