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 Expenses Total Allocation Basis
Salaries $44,000 Number o employees
Depreciation 27,000 Cost of goods sold
Advertising 61,000 Net Sales

 

Item Drilling Grinding Total
Number of employees 2.120 3,180 5,300
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?

Department Students Classrooms
Electrical 148 11,400 sq. ft.
Welding 84 13,400 sq. ft.
Accounting 64 9,400 sq. ft.
Carpentry 54 7,400 sq. ft.
Total 350 41,600 sq. ft.

a. $14,263.

b. $26,520.

c. $28,020.

d. $35,695.

e. $17,625.


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