Boiano Corp The Advertising Department Developed and Aired 150 Spots

question 179

Essay

Boiano Corp. operates a retail store and has two service departments and two operating departments, Hardware and Automotive. During the current year, the departments had the following direct expenses and occupied the following amount of floor space.
$$\begin{array} { | l | l | l | } \hline \text { Department } & \text { Direct Expenses } & \text { Square Feet } \\\hline \text { Advertising } & \$ 50,000 & 750 \\\hline \text { Admini strative } & 100,000 & 1,500 \\\hline \text { Hardware } & 150,000 & 3,000 \\\hline \text { Automotive } & 200,000 & 9,750 \\\hline\end{array}$$ The advertising department developed and aired 150 spots. Of these spots, 60 spots were for Hardware and 90 spots were for Automotive. The store sold $1,500,000 of merchandise during the year; $675,000 in Hardware and $825,000 in Automotive. Indirect expenses include rent, utilities, and insurance expense. Total indirect expenses of $220,000 are allocated to all departments.
Prepare a departmental expense allocation spreadsheet for Boiano. The spreadsheet should assign
(1) direct expenses to each of the four departments, (2) allocate the indirect expenses to each department on the basis of floor space occupied, (3) the advertising department's expenses to the two operating departments on the basis of ad spots placed promoting each department's products,
(4) the administrative department's expenses based on the amount of sales. Complete the departmental expense allocation spreadsheet below. Provide supporting computations for the expense allocations below the spreadsheet.

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Definitions:

Dynamometry

The measurement of forces generated by muscles, often using a device to assess hand grip or muscle strength.

EMG

Electromyography is a diagnostic method used for evaluating the condition of muscles and the nerve cells responsible for their control.

Motor Unit Recruitment

The process by which different motor units are activated to increase muscle tension and achieve graded contractions.

Abductive Reasoning

A form of logical reasoning that starts with an observation or set of observations then seeks to find the simplest and most likely explanation.