Question

The following data is from the Ace Guitar Company for the A and B regions.

A Region B Region
Sales $773,500 $416,500
Cost of goods sold 293,900 158,300
Selling expenses 185,600 100,000
Service department expenses
Purchasing $199,900
Payroll accounting 133,300
Allocate service department expenses proportional to the sales of each region.
A Region?
B Region ?

Answer 1

Ace Guitar Company

The service departments' expenses proportional to the sales of each region are as follows:

A Region = $216,580

B Region = $116,620

Step-by-step explanation:

a) Data and Calculations:

A Region B Region Total

Sales $773,500 $416,500 $1,190,000

Cost of goods sold 293,900 158,300 452,200

Selling expenses 185,600 100,000 285,600

Service department expenses

Purchasing $199,900

Payroll accounting 133,300

Total $333,200

A Region = $216,580 ($773,500 / $1,190,000 * $333,200)

B Region = $116,620 ($416,500 / $1,190,000 * $333,200)