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Luxurious Department Store incurred $6,000 of indirect advertising costs for its operations. The following data...

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Accounting

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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