A Firm Allocates the Cost of Electricity to Its Operating

question 101

Multiple Choice

A firm allocates the cost of electricity to its operating departments based upon the number of electrical outlets in each department. The actual cost for electricity is $20,000 per period plus $0.02 per kilowatt-hour (KWH) . The $20,000 is related to the amount of capacity needed, and capacity is reasonably estimated by the number of outlets. The firm has a total of 1,000 outlets and typically uses 700,000 KWH per period. Department W has 25 outlets and typically uses 15,000 KWH per period.
If the firm switches from a single allocation rate based upon capacity to dual rates based upon capacity and actual use, Department W's cost will:

• A) Increase by $121.43
• B) Increase by $3421.50
• C) Decrease by $50.00
• D) Decrease by $121.43

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Definitions:

Duration Of Symptoms

Refers to the length of time an individual has experienced the signs and symptoms of a particular medical or psychological condition.

Number Of Symptoms

Refers to the quantitative count of signs or symptoms displayed by an individual which are indicative of a particular condition or disorder.

Type I Schizophrenia

A subtype of schizophrenia characterized by the prominence of positive symptoms such as delusions and hallucinations.

Type II Schizophrenia

A subtype of schizophrenia characterized by a predominance of negative symptoms such as emotional flatness and lack of motivation.