Ito Auto Company Incurred $5,000 of Indirect Advertising Costs for Its

Essay

Ito Auto Company incurred $5,000 of indirect advertising costs for its operations.The following data have been collected for the current year for its three departments:
$\begin{array}{lrrr} &\underline{\text {New Cars}}&\underline{\text {Used Cars}}& \underline{\text {Parts and Service}}\\\text { Sales } & \$ 50,000 & \$ 35,000 & \$ 15,000 \\\text { Direct advertising costs } & \$ 2,500 & \$ 2,000 & \$ 500 \\\text { Newspaper ad space } & 60 \% & 35 \% & 5 \%\end{array}$
Determine the costs assigned to each department using the following activity drivers:
a.Sales
b.Direct advertising costs
c.Newspaper ad space