Question

Department A had sales of $100,000.00, Department B had sales of $500,000.00, and total overhead expenses were $62,000.00. The allocation of overhead to department A should be:

$10,333.33
$1,000,000.000
$5,000,000.000
$1,612.00

Answer 1

$62000 represents the total overhead of the 2 departments so we need the combined sales of $600,000 so we can compare the same types of units.
So department A sold 100,000 out of the 600,000 in sales....0r 1/6 of the total sales.

So 1/6 = x/62000. cross multiply to get

6x = 62000 divide by 6 to get
x = 10,333.33

Hope it helps :-)

Answer 2

$10,333.33

Explanation:

The Allocation will be based on the ratio of sales of each Department A & B.

Total Over head Expense = $62,000

Total Sales = Sales of Department A + Sales of Department B = $100,000 + $500,000 = $600,000

Allocation of Overhead to Department A = $62,000 x $100,000 / $600,000

Allocation of Overhead to Department A = $10,333.33