High Traffic Products Corporation has two departments, Small and Large. Central costs could be allocated to...
High Traffic Products Corporation has two departments, Small and Large. Central costs could be allocated to the two departments in various ways.
|
Small Department |
Large Department |
||
|
Square footage |
6,850 |
17,750 |
|
|
Number of employees |
1,120 |
500 |
|
|
Sales |
$320,000 |
$1,740,000 |
If advertising expense of $432,600 is allocated on the basis of sales, the cost per cost driver rate would be ________.
Homework Answers
Answer : $ 0.21 Per sales Dollar
Cost Driver rate = Advertisement Expenses / Total Sales = $ 432,600 / ( 320,000+1740,000)
= $ 432,600 / 2,060,000= $0.21 Per Sales dollar
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