Todweed Academy Allocates Marketing and Administrative Costs to Its Three

question 22

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 Middle School is calculated to be:

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

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Definitions:

Historical Benchmark

A reference point derived from historical data against which current performance or achievements can be measured or compared.

Gain-Sharing Plan

A performance-driven compensation strategy where employees receive bonuses based on the company's savings or gains from improved productivity.

Labour Usage Ratios

Measures that compare the amount of labor used to the outputs achieved, helping businesses assess efficiency.

Financially Funded Plans

Employer-sponsored programs designed to provide employees with financial benefits, such as pension plans or health insurance, which are supported by the company's funds.