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

question 39

Multiple Choice

Johnson Company has two departments, Arrive and Go. Relevant information is presented below: $$\begin{array} { l l l } & \text { Arrive } & \text { G } 0 \\\text { Budgeted Sales } & \$ 400,000 & \$ 2,000,000 \\\text { Actual Sales } & \$ 300,000 & \$ 2,100,000\end{array}$$ 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) decrease by $25,000
• D) increase by $25,000

---

Definitions:

Foreign Currency

Currency used in a country that is not the domestic currency where a person or company resides.

US Goods

Products manufactured or produced within the United States, encompassing a wide range of commodities, from food to technology.

Foreign Goods

Products or services that are produced in other countries and imported into the domestic market.

Rate Of Inflation

The percentage increase in the price level of goods and services in an economy over a period of time, typically measured annually.