Where an area of interest contracts in size and subsequently becomes two distinct operations:
A) All costs to date must be apportioned equally between the two new operations.
B) All future costs must be accounted for separately.
C) Only the costs up to and including production should be apportioned between the two sites.
D) Pre-production cost should be accumulated and then apportioned between the two operations based on the size of the new areas of interest.
E) None of the given answers.

Question

Quizplus · Accepted Answer

When an area of interest contracts and becomes two distinct operations, future costs must be accounted for separately to ensure accurate financial reporting and management of each operation.

Where an Area of Interest Contracts in Size and Subsequently