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28 November, 00:58

Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising costs are $140,000 this year, and departmental sales for this year follow. Department Sales 1 $ 155,000 2 291,400 3 173,600 How much advertising cost is allocated to each department if the allocation is based on departmental sales?

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  1. 28 November, 02:12
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    D1 = 0.25 * 140,000 = 35,000

    D2 = 0.47*140,000 = 65,800

    D3 = 0.28*140,000 = 39,200

    Explanation:

    Giving the following information:

    Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments.

    Advertising costs are $140,000 this year.

    Departmental sales for this year follow:

    Department Sales 1 $ 155,000

    Department Sales 2 $291,400

    Department Sales 3 $173,600

    First, we need to find the weighted average participation in sales:

    Total sales = 155,000 + 291,400 + 173,600 = 620,000

    Department 1 = 155,000/620,000 = 0.25

    Department 2 = 291,400/620,000 = 0.47

    Department 3 = 173,600/620,000 = 0.28

    Now, we can allocate the advertising costs for each department:

    D1 = 0.25 * 140,000 = 35,000

    D2 = 0.47*140,000 = 65,800

    D3 = 0.28*140,000 = 39,200
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