The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be:
A) Floor space of each department.
B) Relative number of items each department had on sale.
C) Number of customers to enter each department.
D) An equal amount of cost for each department.
E) Proportion of sales of each department.

Question

Quizplus · Accepted Answer

The most useful allocation basis for departmental costs in an advertising campaign for a storewide sale would likely be the proportion of sales of each department. This allocation method would take into account the amount of revenue generated by each department and would therefore provide an accurate reflection of the impact of the campaign on each department's performance. Floor space, number of items on sale, and number of customers entering each department may not be the best indicators of each department's contribution to the overall success of the campaign. Allocating an equal amount of cost to each department would not reflect the varying levels of activity and revenue generated by each department.

The Most Useful Allocation Basis for the Departmental Costs of an Advertising