Answer the Following Questions Using the Information Below

question 163

Multiple Choice

Answer the following questions using the information below:
King Corporation has two departments, Small and Large. Central costs could be allocated to the two departments in various ways.

-If advertising expense of $300,000 is allocated on the basis of sales, the amount allocated to the Small Department would be:

• A)$50,000
• B)$75,000
• C)$210,000
• D)$250,000

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Definitions:

Analyst

A professional who studies various aspects of financial data to predict market trends, evaluate investments, and provide recommendations.

Nominal Interest Rate

The stated rate of interest without adjustment for inflation or other factors.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the real cost of borrowing or the real yield on an investment.

Inflation Rate

The percentage increase in the general level of prices for goods and services in a country over a period, typically measured annually.