Question

Super Grocery store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Administrative Square feet of floor space $15,000 Advertising Amount of dollar sales $8,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Produce 1,000 $80,000 Bakery 800 $30,000 Meats 1,200 $42,000 Totals 3,000 $152,000 What is the total administrative expense allocated to the Meats department?

Answer 1

6,000

Step-by-step explanation:

The computation of the total administrative expense allocated to the Meats department is shown below:

= (Total administrative expenses ÷ total square feet) × meat square feet

= ($15,000 ÷ 3,000) × 1,200

= 6,000

We simply do the proportion based on the meats department by dividing the total square feet

All other information which is given in the question is not considered. Hence, ignored it