Marks Corporation Has Two Operating Departments, Drilling and Grinding, and an Office

Marks Corporation has two operating departments, Drilling and Grinding, and an office. The three categories of office expenses are allocated to the two departments using different allocation bases. The following information is available for the current period: $$\begin{array} { l c c c } \text { Office Expenses } & \text { Total } & { \text { Allocation Basi5 } } \\\text { Salaries } & \$30,000 & \text { Number of employees } \\\text { Depreciation } & 20,000 & \text { Cost of goods sold } \\\text { Advertisirg } & 40,000 & \text { Net sales } & \\\text { Item } & \text { Drilling } & \text { Grinding } & \text { Tatal } \\\text { Number of employees } & 1,000 & 1,500 & 2,500 \\\text { Net sales } & \$325,000 & \$ 475,000 & 800,000 \\\text { Cast of goods sald } & \$75,000 & \$ 125,000 & 200,000\end{array}$$ The amount of salaries that should be allocated to Drilling for the current period is:

A) $30,000.
B) $18,000.
C) $15,000.
D) $10,000.
E) $12,000.

Correct Answer:

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