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Given the scenario at Macee Store, which comprises three operating departments and incurs advertising costs of $136,000 that are beneficial to all departments, analyze the sales data for each operating department. Formulate a comprehensive question to guide respondents in addressing the allocation of advertising costs among the departments.

User Wreigh
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Final answer:

To allocate the advertising costs among three departments of Macee Store, a comprehensive question would be how to divide the $136,000 to reflect the benefits received by each department accurately.

Step-by-step explanation:

The student's question involves the allocation of advertising costs across different departments within a store. To address this question, we need to craft a comprehensive question to guide respondents in determining how the $136,000 advertising cost should be divided among the three operating departments of Macee Store. The allocation method could be based on factors such as department revenues, floor space, or direct departmental benefit.

Possible methods include:

  • Equal allocation where each department is allocated an equal third of the total advertising cost.
  • Proportional allocation based on departmental revenue, where each department's share of advertising costs is proportional to its share of total store revenue.
  • Proportional allocation based on floor space occupied by each department, assuming ads benefit departments relative to the space they use.
  • Benefit received approach, where costs are allocated based on managerial judgment concerning the extent each department benefits from the advertising.

A comprehensive question that could be asked is, "How should Macee Store allocate its advertising costs of $136,000 among the three departments to accurately reflect the benefits each department receives from the advertising efforts?"

User Chad Schouggins
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