Super Grocery Store Allocates Its Service Department Expenses to Its

question 38

Multiple Choice

Super Grocery store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: $\begin{array}{llc}\text { Expense } & \text { Basis for allocation } & \text { Amount } \\\text { Administrative } & \text { Square feet of floor space } & \$ 15,000 \\\text { Advertising } & \text { Amount of dollar sales } & \$ 8,000\end{array}$

The following information is available for its three operating (sales) departments:

$\begin{array}{lcc}\text { Department } &\text { Square }&\text { Dollar Sales } \\&\text { Feet }\\ \text { Produce } & 1,000 & \$ 80,000 \\ \text { Bakery } & 800 & \$ 30,000 \\ \text { Meats } & 1,200 & \$ 42,000 \\ \text { Totals } & 3.000 & \$ 152,000 \\\end{array}$
What is the total administrative expense allocated to the Meats department?

• A) $1,200.
• B) $6,000.
• C) $9,000.
• D) $3,000.
• E) $4,145.

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Definitions:

Absolute Exchange Rate

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The rate at which the general level of prices for goods and services is rising, concurrently eroding purchasing power, usually expressed as a percentage.

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Euro

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