Reference no: EM132502610
Management of Wee Ones (WO), 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:
Center Budgeted Revenue Actual Revenue Budgeted Direct Costs Actual Direct Costs
Downtown $501,000 $405,600 $347,300 $354,200
Irvine 751,500 540,800 498,300 446,600
H.Beach 417,500 743,600 664,400 739,200
Totals $1,670,000 $1,690,000 $1,510,000 $1,540,000
- WO's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $70,000.
Question 1: 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?
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