1. Marks Corporation has two operating departments, 2. Canfield Technical School allocates administrative costs

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QUESTION:

1. 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.

Office ExpensesTotalAllocation Basis
Salaries$44,000Number o employees
Depreciation27,000Cost of goods sold
Advertising61,000Net Sales

 

ItemDrillingGrindingTotal
Number of employees2.1203,1805,300
Net Sales$347750$508,250$856,000
Cost o goods sold$96,000$160,000$256,000

The amount of the total office expenses that should be allocated to Grinding for the current period is (Do not round your intermediate calculations.)

a. $60,000

b. $61,844

c. $79,494

d. $52,594

e. $132,000

2. Canfield Technical School allocates administrative costs to its respective departments based on the number of students enrolled, while maintenance and utilities are allocated per square feet of the classrooms. Based on the information below, what is the total amount of administrative cost to the Accounting Department (rounded to the nearest dollar) if administrative costs for the school were $78,000, maintenance fees were $14,800, and utilities were $7,400?

DepartmentStudentsClassrooms
Electrical14811,400 sq. ft.
Welding8413,400 sq. ft.
Accounting649,400 sq. ft.
Carpentry547,400 sq. ft.
Total35041,600 sq. ft.

a. $14,263.

b. $26,520.

c. $28,020.

d. $35,695.

e. $17,625.


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