ALLOCATING OPERATING EXPENSE—RELATIVE NET SALES

ALLOCATING OPERATING EXPENSE—RELATIVE NET SALES Tina Domingo owns a car stereo store. She has divided her store into three departments. Net sales for the month of July are as follows:Deluxe: ….$36,000Standard: ….30,000Economy: ….54,000Advertising expense for July was $24,000.

Allocate the advertising expense among the three departments on the basis of relative net sales.

ALLOCATING OPERATING EXPENSE—RELATIVE NET SALES Amelia Diaz owns a sporting goods store. She has divided her store into three departments. Net sales for the month of July are as follows:Football: ……$10,000Basketball: ………6,000Baseball: ……9,000Advertising expense for July was $5,000.

Allocate the advertising expense among the three departments on the basis of relative net sales.

Solution: