Black Bear Auto Company incurred $120,000 of indirect advertising costs for its operations. The following 2017 data have been collected for its three departments: New Cars Used Cars Parts and Service Direct advertising costs $30,000 $24,000 $6,000 Newspaper ad space 60% 30% 10% Sales $250,000 $200,000 $50,000 Required: Determine the costs allocated to each department using the following allocation bases: a. Direct advertising costs b. Newspaper ad space c. Sales

a. Allocating cost using direct advertising costs

We have:

Cost allocated to New Cars = $60,000

Cost allocated to Used Cars = $48,000

Cost allocated to Parts and Service = $12,000

b. Allocating cost using Newspaper ad space

We have:

Cost allocated to New Cars = $72,000

Cost allocated to Used Cars = $36,000

Cost allocated to Parts and Service = $12,000

c. Allocating cost using Sales

We have:

Cost allocated to New Cars = $60,000

Cost allocated to Used Cars = $48,000

Cost allocated to Parts and Service = $12,000

Explanation:

Given:

                                           New Cars         Used Cars       Parts and Service

Direct advertising costs     $30,000            $24,000                $6,000

Newspaper ad space               60%                  30%                       10%

Sales                                   $250,000          $200,000            $50,000

The costs allocated to each department can now be calculated as follows:

a. Allocating cost using direct advertising costs

The indirect advertising costs can be allocated using the following formula:

Cost allocated to a department = (Direct advertising costs of the department  / Sum of direct advertising costs of the 3 departments) * Indirect advertising costs (1)

Using equation (1), we have:

Cost allocated to New Cars = ($30,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $60,000

Cost allocated to Used Cars = ($24,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $48,000

Cost allocated to Parts and Service = ($6,000 / ($30,000 + $24,000 +$6,000)) * $120,000 = $12,000

b. Allocating cost using Newspaper ad space

The indirect advertising costs can be allocated using the following formula:

Cost allocated to a department = Percentage of  Newspaper ad space of the department * Indirect advertising costs (2)

Using equation (2), we have:

Cost allocated to New Cars = 60% * $120,000 = $72,000

Cost allocated to Used Cars = 30% * $120,000 = $36,000

Cost allocated to Parts and Service = 10% * $120,000 = $12,000

c. Allocating cost using Sales

The indirect advertising costs can be allocated using the following formula:

Cost allocated to a department = (Sales of the department  / Sum of Sales of the 3 departments) * Indirect advertising costs (3)

Using equation (3), we have:

Cost allocated to New Cars = ($250,000 / ($250,000 + $200,000 + $50,000)) * $120,000 = $60,000

Cost allocated to Used Cars = ($200,000 / ($250,000 + $200,000 + $50,000)) * $120,000  * $120,000 = $48,000

Cost allocated to Parts and Service = ($50,000 / ($250,000 + $200,000 + $50,000)) * $120,000  * $120,000 = $12,000

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.

d. automatic stabilizers.

explanation: