Macee Department Store has three departments and it conducts

Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising costs are $110,000 this year, and departmental sales for this year follow. Department Department 1 $ 204,000 Department 2 333,200 Department 3 142,800 Sales How much advertising cost is allocated to each department if the allocation is based on departmental sales? % of Advertising to Allocated Total Department Sales Allocate Amount Total

Solution

Calculations A B = A / 680,000 C D = B x C Department Sales % of Total Advertising to allocate Allocated amount 1    204,000 30.00%           110,000        33,000 2    333,200 49.00%           110,000        53,900 3    142,800 21.00%           110,000        23,100 Total    680,000 100.00%     110,000