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:
Budgeted Budgeted Actual Actual Direct Costs Direct Costs Center Revenue Revenue 336,000 425,000 561,000 $ $364,800 372,000 Downtown Irvine 588,000 516,800 465,000 H. Beach 756,000 714,000 638,400 713,000 $1,680,000 $1,700,000 $1,520,000 $1,550,000
Totals WO's advertising, which is handled by the home office, is not reflected in the preceding figures and amounted to $71,000. 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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