Use the Following Information for the Next 6 Questions

question 42

Multiple Choice

Use the following information for the next 6 questions.
Tutors-R-Us provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 20x1, the firm's information system produced the following data:
-Which of the following is the most logical allocation base for facility rent if the relevant cost object is a subject area (product line) ?

• A) Number of tutors
• B) Direct costs
• C) Percentage of square feet occupied
• D) Direct labor hours

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Definitions:

Full Costing

An accounting method that includes all direct and indirect costs in the price of a product or service.

Carrying Cost

The total costs associated with holding inventory or assets, including storage, insurance, and taxes.

Administrative Costs

Expenses related to the general operation of a business, including salaries of executive officers, legal and clerical salaries, and other general expenses.

Sales Taxes

Taxes imposed by governments on sales of goods and services, typically calculated as a percentage of the retail price paid by the consumer.