Eclectic Furniture Company Allocates Its Indirect Salaries of $12,500 on the Basis

question 110

Essay

Eclectic Furniture Company allocates its indirect salaries of $12,500 on the basis of sales.Determine the indirect salaries allocated to Departments 1 and 2 using the following information:
$\begin{array}{lrrr}&\text { Dept. } 1& \text { Dept. } 2 &\text { Combined }\\\text { Revenues from sales } & \$ 182,000 & \$ 78,000 & \$ 260,000 \\\text { Direct salaries } & 42,250 & 22,750 & 65,000\end{array}$

Salaries allocated Dept.1 _______________
Salaries allocated to Dept.2 _______________

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Definitions:

Dividend Growth Rate

The pace at which a business boosts the dividends it distributes to its investors over a period.

Required Return

This is the minimum profit that an investor expects to make on an investment, reflecting the level of risk involved.

Constant Growth

A model assuming that the value of an investment grows at a steady, unchanging rate indefinitely.

Constant Rate

A fixed value, often used in calculations involving growth or decay, where the rate does not change over time.