Answer the following questions using the information below:
The Darwin Harbour Corporation currently leases a corporate suite in an office building for a cost of $90 000 a year.Only 70% of the corporate suite is currently being used.A start-up business has proposed a plan that would use the other 30% of the suite and increase the overall costs of maintaining the space by $10 000.
-If the stand-alone method were used,what amount of cost would be allocated to the start-up business?

Question

Quizplus · Accepted Answer

The stand-alone method allocates costs based on the proportion of space used. The start-up business uses 30% of the suite, so 30% of the $90,000 lease cost is $27,000. Adding the $10,000 increase in costs, the total allocated cost is $37,000.

Answer the Following Questions Using the Information Below