Quinlan, Inc

question 111

Multiple Choice

Quinlan, Inc. has two support departments (Maintenance and Personnel) and two operating departments (Tables and Chairs) . The Maintenance department provides more services to the Personnel department than the Personnel department provides to Maintenance. Once the support department costs have been allocated to the operating departments, each operating department allocates its total costs to units produced.
A
Assume the direct method is used. The cost per unit in the Chair department would be:

• A) $27.025 per chair
• B) $23.509 per chair
• C) $25.147 per chair
• D) $25.900 per chair

---

Definitions:

Multiple IRRs

The situation where a project has more than one internal rate of return, occurring due to unconventional cash flows.

Reinvestment Assumption

The theory that cash flows will be reinvested at a constant rate, often used in financial modeling.

Cost of Capital

The rate of return that a business must achieve in order to generate value, representing the opportunity cost of investing capital in a specific business rather than in an alternative venture.

Average Return

A statistical measure representing the mean outcome or yield from an investment over a given period of time.