Answer the following questions using the information below:
Trustme Vehicle Rental Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.
$$\begin{array} { l r r }
& \text { Car Rental } & \text { Truck Rental } \
\text { Number of vehicles in fleet } & 700 & 300 \
\text { Number of employees } & 150 & 50 \
\text { Sales } & \$ 1500000 & \$ 750000
\end{array}$$
-If the administrative expense of $125 000 is allocated on the basis of number of employees,the amount allocated to the Truck Rental Department would be:
A)$93 750
B)$75 000
C)$125 000
D)$31 250

Question

Answer the following questions using the information below:
Trustme Vehicle Rental Corporation has two departments,Car Rental and Truck Rental.Central costs may be allocated to the two departments in various ways.
 $$\begin{array} { l r r } 
& \text { Car Rental } & \text { Truck Rental } \
\text { Number of vehicles in fleet } & 700 & 300 \
\text { Number of employees } & 150 & 50 \
\text { Sales } & \$ 1500000 & \$ 750000
\end{array}$$
-If the administrative expense of $125 000 is allocated on the basis of number of employees,the amount allocated to the Truck Rental Department would be:
A)$93 750
B)$75 000
C)$125 000
D)$31 250

Quizplus · Accepted Answer

The allocation is based on the number of employees. Truck Rental has 50 out of a total of 200 employees (150 + 50), so it receives 25% of the $125,000 administrative expense, which is $31,250.

Answer the Following Questions Using the Information Below: Trustme Vehicle

Answer the Following Questions Using the Information Below:
Trustme Vehicle