How should the costs be allocated for the current year

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Question - Chilton Day School allocates marketing and administrative costs to its three schools based on total annual tuition revenue for the schools. Last year the allocations (000s omitted) were as follows:

 

Preschool

Middle School

High School

Total

Tuition revenue

$1,700

$2,000

$2,400

$6,100

Marketing and administration

375

425

500

1,300

In the current year, the middle and high schools experienced no change in revenues, but the preschool's tuition revenue increased to $2.1 million. Marketing and administrative costs rose to $1,450,000.

Required - Using revenue as an allocation base, how should the costs be allocated for the current year?

Reference no: EM132479604

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