Marks Corporation Has Two Operating Departments, Drilling and Grinding, and an Office

question 8

Multiple Choice

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: The amount of the advertising cost that should be allocated to Grinding for the current period is:

• A) $325,000.
• B) $16,250.
• C) $54,250.
• D) $45,000.
• E) $23,750.

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Definitions:

Market Scope

The extent or range of areas (geographical, product lines, demographics) a business or product targets in order to market its goods and services.

Competitive Advantage

The attributes or conditions that allow an organization to perform better than its competitors.

Drug Interdiction

Measures aimed at stopping the illegal trafficking of drugs.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period.