2 Problem #2 Chapter 9 Performance Measurement and Responsibility Accounting Advertising and purchasing department expenses of Cozy Bookstore are allocated to operating departments on the basis of dollar sales and purchase orders, respectively. Information about the allocation bases for the three operating departments follows. Complete the following table by allocating the expenses of the two service departments (advertising and purchasing) to the three operating departments. Direct Purchase Expenses Sales Orders Advertising $36,000 Purchasing $54,000 Books 360,000 $450,000 240 Magazines 130,000 $180,000 240 Newspapers 160,000 $270,000 120 Total $740,000 $900,000 600 Totals Advertising Purchasing Books Magazines Newspaper Direct expense $740,000 36,000 $54,000 $360,000 $130,000 $160,000 Service Dept. exps. Advertising Purchasing Totals $740,000