Emrald Corp currently uses a manufacturing facility costing $520,000 per year; 85% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 15% of the facility and increase the overall costs of maintaining the space by 12%. If the stand-alone method were used, what amount of cost would be allocated to the start-up business?
A) $75,660
B) $78,000
C) $66,300
D) $87,360

Question

Quizplus · Accepted Answer

Amount allocated = $520,000 × 1.12 × 0.15 = $87,360

Emrald Corp Currently Uses a Manufacturing Facility Costing $520,000 Per