Pepper Department Store Allocates Its Service Department Expenses to Its

question 35

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

• A) $12,500.
• B) $10,800.
• C) $30,000.
• D) $ 9,000.
• E) $7,500.

---

Definitions:

Progressive Discipline

A process of dealing with job-related behavior that does not meet expected and communicated performance standards, starting with the least severe action to address the issue.

Negative Consequences

Undesirable outcomes or penalties that result from an action or decision in the workplace.

Punishment

Yet another term from reinforcement theory, punishment refers to a situation in which a behavior is followed by negative consequences and so is not repeated.

Stable Employers

Companies or organizations known for their financial stability and consistent employment opportunities.