Trifecta Inc If Trifecta Uses Dual-Cost Accounting Procedures and Variable Administrative Costs

question 66

Multiple Choice

Trifecta Inc. allocates administrative costs on the basis of square footage. Short-run monthly usage and anticipated long-run monthly usage of square footage for Operating Departments 1 and 2 follow. $\begin{array} { l c c c } & \text { Dept. 1 } & \text { Dept. 2 } & \text { Total } \\\text { Short-run usage } & 30,000 & 70,000 & 100,000 \\\text { Long-run usage } & 50,000 & 50,000 & 100,000\end{array}$ If Trifecta uses dual-cost accounting procedures and variable administrative costs total $320,000, the amount of variable administrative cost to allocate to Department 1 would be:

• A)$96,000.
• B)$128,000.
• C)$160,000.
• D)$192,000.
• E)$320,000.

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Definitions:

Cash Bidding Price

The price offered in cash for an asset at an auction or in a competitive bidding situation.

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Equity ownership in a company, giving holders voting rights and a share in the company's profits through dividends.

Ontario Ltd.

A term used to designate a limited company in the province of Ontario, Canada, often seen in business names.

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Involves the joining together of parts of companies to accomplish specific, limited objectives. Joint ventures are controlled by the combined management of the two (or more) parent companies.