Sales Smart Allocates Advertising Expenses to Its Two Departments, F

Multiple Choice

Sales Smart allocates advertising expenses to its two departments, F and M, using sales as the cost driver. For the current year the sales for department F are estimated to be $900,000 and for department M $600,000 and total advertising expenses are budgeted at $55,000. The indirect cost rate is:

A) F$33,000: M $22,000
B) $.036 per sales dollar
C) F$.0611: M $.0917 per sales dollar
D) F$36,667: M $18,333