Pepper Department Store Allocates Its Service Department Expenses to Its

question 72

Multiple Choice

Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: $\begin{array}{l}\begin{array} { l l l } \text { Expense } & \text { Basis for allocation } & \text { Amount } \\\text { Rent } & \text { Square feet of floor space } & \$ 24,000 \\\text { Advertising } & \text { Amount of dollar sales } & \$ 30,000 \\\text { Administrative } & \text { Number of employees } & \$ 45,000\end{array}\\\\\text { The following information is available for its three operating (sales) departments: }\\\\\begin{array} { l c c r c } \text { Department } & \begin{array} { c } \text { Square } \\\text { Feet }\end{array} & \text { Dollar Sales } & \begin{array} { c } \text { Number of } \\\text { employees }\end{array} \\\text { A } & 3,000 & \$280,000 & 6 \\\text { B } & 3,400 & \$300,000 & 8 \\\text { C } & 3,600 & \$420,000 & 10 \\\text { Totals } & \underline { 10,000 } &\$1,000,000 &24 \\\hline\end{array}\end{array}$
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What is the total expense allocated to Department B?

• A) $30,462.
• B) $30,775.
• C) $30,500.
• D) $29,375.
• E) $32,160.

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