Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.

-If the facility lease expense of $350,000 is allocated on the basis of vehicles in the fleet, the amount allocated to the Car Rental Department would be:
A)$245,000
B)$105,000
C)$200,000
D)$150,000

Question

Answer the following questions using the information below:
Monster Vehicle Rental Corporation has two departments, Car Rental and Truck Rental. Central costs may be allocated to the two departments in various ways.
 
-If the facility lease expense of $350,000 is allocated on the basis of vehicles in the fleet, the amount allocated to the Car Rental Department would be:
A)$245,000 
B)$105,000 
C)$200,000 
D)$150,000

Quizplus · Accepted Answer

The allocation is based on the number of vehicles in the fleet. If the Car Rental Department has 70% of the vehicles, then 70% of $350,000 is $245,000.

Answer the Following Questions Using the Information Below