Answer the Following Questions Using the Information Below:
Trustme Vehicle

question 29

Multiple Choice

Answer the following questions using the information below:
Trustme Vehicle Rental Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.
$$\begin{array} { l r r } & \text { Car Rental } & \text { Truck Rental } \\\text { Number of vehicles in fleet } & 700 & 300 \\\text { Number of employees } & 150 & 50 \\\text { Sales } & \$ 1500000 & \$ 750000\end{array}$$
-If the administrative expense of $125 000 is allocated on the basis of number of employees,the amount allocated to the Truck Rental Department would be:

• A)$93 750
• B)$75 000
• C)$125 000
• D)$31 250

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Definitions:

Total Revenue

The overall amount of money generated by the sale of goods or services before any costs are subtracted.

Price Effect

The impact on consumer demand and producer behavior due to a change in the price of a good or service, holding other factors constant.

Quantity Effect

The impact on total revenue when the quantity sold changes while holding price constant.

Total Revenue

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.