High Traffic Products Corporation has two departments,Small and Large.Central costs could be allocated to the two departments in various ways.

If advertising expense of $432,600 is allocated on the basis of sales,the cost per cost driver rate would be ________.
A)$0.2 per dollar of sales
B)$0.21 per dollar of sales
C)$0.23 per dollar of sales
D)$0.22 per dollar of sales

Question

High Traffic Products Corporation has two departments,Small and Large.Central costs could be allocated to the two departments in various ways.

If advertising expense of $432,600 is allocated on the basis of sales,the cost per cost driver rate would be ________.
A)$0.2 per dollar of sales 
B)$0.21 per dollar of sales 
C)$0.23 per dollar of sales 
D)$0.22 per dollar of sales

Quizplus · Accepted Answer

Cost per cost driver rate = $432,600 ÷ ($320,000 + $1,740,000)= $0.21

High Traffic Products Corporation Has Two Departments,Small and Large