All of Jill Enterprise's Operations Are Housed in One Building,with

question 162

Multiple Choice

All of Jill Enterprise's operations are housed in one building,with the costs of occupying the building accumulated in a separate account.The total costs incurred in May amounted to $24,000.The company allocates these costs on the basis of square metres of floor space occupied.Administrative offices,sales offices,and factory operations occupy 9,000,6,000,and 30,000 square metres,respectively.How much will be classified as a product cost for May?

• A)$3,200
• B)$4,800
• C)$16,000
• D)$24,000

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Definitions:

Transfer Price

The amount at which commodities and services are dealt among subdivisions within the same business entity.

Valve Division

A dedicated segment of a company focusing on the production or distribution of valves.

Variable Expenses

Costs that vary directly with the level of business activity or production volume.

Transfer Price

The price charged by one segment of a company for a product or service that is supplied to another segment of the same company.