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

question 91

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: $\begin{array}{lll}\text { Ottice Expenses } & \text { Total } & \text { Allocation Basis } \\\text { Salaries } & \$ 30,000 & \text { Number of employees } \\\text { Depreciation } & 20,000 & \text { Cost of goods sold } \\\text { Advertising } & 40,000 & \text { Net sales }\end{array}$

$\begin{array}{lrrrr}\text {Item}&\text {Drilling}&\text {Grinding}&\text {Total}\\\text { Number of emplovees } & 1,000 & 1,500 & 2,500 \\\text { Net sales } & \$ 325,000 & \$ 475,000 & \$ 800,000 \\\text { Cost of goods sold } & \$ 75,000 & \$ 125,000 & \$ 200,000\end{array}$
- The amount of salaries that should be allocated to Drilling for the current period is:

• A) $10,000.
• B) $12,000.
• C) $18,000.
• D) $30,000.
• E) $15,000.

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Definitions:

Medieval Europe

A historical period in Europe that lasted from the 5th to the late 15th century, characterized by feudalism, the manorial system, and the prevalence of Christian culture.

Astrology

A belief system that posits the positions and movements of celestial bodies can directly influence human affairs and natural events.

Scriptures Literally

Interpreting religious texts in a way that takes the words in their most basic and straightforward meaning without metaphor or allegory.

Fundamentalists

Interpret their scriptures literally, seek to establish a direct, personal relationship with the higher being(s) they worship, and are relatively intolerant of nonfundamentalists.