Marks Corporation Has Two Operating Departments, Drilling and Grinding, and an Office

question 9

Multiple Choice

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: The amount of the advertising cost that should be allocated to Drilling for the current period is:

• A) $16,250.
• B) $45,000.
• C) $23,750.
• D) $325,000.
• E) $54,250.

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Definitions:

Accelerating Expenses

Expenses that increase at a faster rate than usual, often leading to financial pressure on a business or project.

Economies of Scale

Businesses achieve cost benefits as a result of their operational size, where the cost for each produced unit diminishes as the size of operation expands.

Functional Lines

Divisions within an organization that are categorized based on specific functions or roles, such as marketing, finance, or operations.

Employee Performance

An assessment of how effectively an employee performs their job duties and responsibilities.