Luxurious Department Store incurred $6,000 of indirect advertising costs for its operations. The following data...
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Luxurious Department Store incurred $6,000 of indirect advertising costs for its operations. The following data has been collected for 2018 for its three departments:
Sportswear
Lingerie
Appliances
Sales
$160,000
$120,000
$120,000
Direct advertising costs
$ 7,000
$ 12,000
$ 3,000
Newspaper ad space
62%
20%
18%
How much of the indirect advertising costs will be allocated to the Lingerie Department if direct advertising costs is the activity driver? (Round to the nearest dollar if necessary)
a.$12,000
b.$6,000
c.$3,000
d.$3,273
Garden of Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs for Brights of $60 per unit and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls. What is the gross profit for Dulls assuming the constant gross margin percentage method is used?
a.$120,000
b.$150,000
c.$37,500
d.$200,000
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