Emrald Corp currently uses a manufacturing facility costing $560,000 per year; 90% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 10% of the facility and increase the overall costs of maintaining the space by 11%. If the incremental method were used, what amount of cost would be allocated to the start-up business?
A) $50,400
B) $61,600
C) $62,160
D) $56,560

Question

Quizplus · Accepted Answer

Amount allocated = $560,000 × 11% = $61,600

Emrald Corp Currently Uses a Manufacturing Facility Costing $560,000 Per