Management of Children Are Precious (CAP), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm's accountant has provided the following data: CAP's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $60,000.
Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices. How much advertising would be allocated to the Irvine center?
A) $17,838.
B) $19,800.
C) $20,000.
D) $20,400.
E) $21,000.

Question

Management of Children Are Precious (CAP), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm's accountant has provided the following data:  CAP's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $60,000.
Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices. How much advertising would be allocated to the Irvine center?
A) $17,838. 
B) $19,800. 
C) $20,000. 
D) $20,400. 
E) $21,000.

Quizplus · Accepted Answer

The Answer of Management of Children Are Precious (CAP), an operator of day-care facilities, wants the company's profit to be subdivided by center. The firm's accountant has provided the following data:  CAP's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $60,000.
Assume that management used the allocation base that is most influenced by advertising effort and consistent with sound managerial accounting practices. How much advertising would be allocated to the Irvine center?
A) $17,838. 
B) $19,800. 
C) $20,000. 
D) $20,400. 
E) $21,000.

Management of Children Are Precious (CAP), an Operator of Day-Care