Question

Super Grocery Store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments

Amount
Expense
Administrative
Basis for allocation
Square feet of floor space
Amount of dollar sales
$ 32,000
Advertising
$ 25,000
The following information is available for its three operating (sales) departments:
Dollar Sales
Department
Produce
Square Feet
1,410
$ 97,000
Bakery
940
Meats
2,350
Totals
4,700
What is the total administrative expense allocated to the Meats department?
Multiple Choice
$6,436
$2.350
$4,700.
$16,000
$20,700
47,000
59,000
$ 203,000

Answer 1

The total administrative expense allocated to the Meats department is $16,000.

Step-by-step explanation:

To calculate the total administrative expense allocated to the Meats department, we need to use the basis for allocation, which is the square feet of floor space. According to the data given, the square feet of floor space for the Meats department is 2,350. We can use this information to allocate the administrative expense proportionally.

The total administrative expense is $32,000. To find the allocation for the Meats department, we use the formula:

Allocation for Meats department = (Square feet of Meats department / Total square feet) x Total administrative expense

Plugging in the values, we get:

Allocation for Meats department = (2,350 / 4,700) x 32,000 = $16,000