Life Lessons provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 20x1, the firm's information system produced the following data: $\begin{array}{lllll}&\text { Number of}&\text { Number of }&\text {Percent of}&\text { Direct }\
&\text { Tutors } &\text { Students } &\text { Faculty } & \text { Costs }\
\text { English } & 4 & 20 & 10 \% & \$ 6,000 \
\text { Mathematics } & 3 & 24 & 25 & 8,000 \
\text { Science } & 5 & 15 & 50 & 12,000\\text { History }& 2&8&15&3,000
\end{array}$ Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Life Lessons operations for November 20x1 included: $\begin{array}{lr}
\text { Facility rent } & \$ 2,500 \
\text { Custodial services } & 1,800 \
\text { Utilities } & 600 \
\text { Computer equipment amortization } & 800 \
\text { Advertising } & 400
\end{array}$
Which of the following is the most logical allocation base for facility rent if the relevant cost object is a subject area (product line)?
A) Number of tutors
B) Direct costs
C) Percentage of square feet occupied
D) Direct labour hours

Question

Quizplus · Accepted Answer

Allocating facility rent based on the percentage of square feet occupied by each subject area is the most logical method because it directly relates to the physical space each subject area uses, which is a significant factor in facility-related costs.

Life Lessons Provides Academic Enrichment and Review Activities for High