Which Allocation Base Is Best Used to Allocate Building Depreciation

question 27

Multiple Choice

Which allocation base is best used to allocate building depreciation?

• A) Square feet of space used
• B) Number of employees
• C) Hours used
• D) Electric usage

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Definitions:

Perfect Competition

A market structure characterized by a large number of small firms, homogenous products, free entry and exit, and perfect information, leading to firms being price takers.

Marginal Cost

The expense incurred from manufacturing an additional unit of a product.

Marginal Revenue

The increment in revenue resulting from the sale of an additional unit of output in a market.

Marginal Cost

The budget allocation for the production of an additional unit of a product or service.