......................... Departments
........................... P Q R
Sales value............... N23,400
Selling expenses.......... 1,100 N1,400 N1,280
Administrative expenses...N1,400 N1,000 N1,020
Cost of sales............. N6,900.... N6,700 N5,500
Sales value of department Q doubles that of p, which is 1/3 of R. Depreciation which amounts to N1,800 is to be apportioned among the three departments in the ratio 3:5:7 respectively.
Determine the total expenses of department P?
9,760
9,400
2,860
2,500
Correct answer is C
Depreciation is considered an operating expense so it will be added to the expenses.
Total expense of P = Selling expenses + Administrative expenses + depreciation
1100 + 1400 + 3/15 x 1800
1100 + 1400 + 360 = 2,860