Todweed Academy Allocates Marketing and Administrative Costs to Its Three

question 122

Multiple Choice

Todweed Academy allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools: $\begin{array}{ccccc} & \text { Lower } & \text { Middle } & \text { Upper } \\{\text { School }} & \text { School } & \text { School } & \text { School } & \text { Total } \\\text { Tuition revenue } & \$ 1,000,000 & \$ 800,000 & \$ 1,200,000 & \$ 3,000,000\\\text { Marketing and }\\\text { administrative }&&&&\$1,200,000\end{array}$ Using revenue as an allocation base, the amount of costs allocated to the Lower School is calculated to be:

• A) $240,000.
• B) $320,000.
• C) $400,000.
• D) $480,000.
• E) $600,000.

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