Use the information to answer questions
……………………. 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
The correct answer is: C
Explanation
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 + \(\frac{3}{15}\) x 1800
1100 + 1400 + 360 = 2,860