Marks Corporation Has Two Operating Departments,Drilling and Grinding,and an Office

question 105

Multiple Choice

Marks Corporation has two operating departments,Drilling and Grinding,and an office.The three categories of office expenses are allocated to the two departments using different allocation bases.The following information is available for the current period:

-The amount of depreciation that should be allocated to Grinding for the current period is:

• A)$20,000.
• B)$25,000.
• C)$7,500.
• D)$12,500.
• E)$40,000.

---

Definitions:

Equilibrium Price

The rate in the marketplace at which the volume of goods being offered is the same as the volume of goods being sought.

Equilibrium Quantity

The quantity of a good or service at which demand meets supply.

Supply Decreases

A situation in which the quantity of a product or service offered in the market declines due to various factors like increased production costs or reduced number of suppliers.

Invisible Hand Concept

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, guiding individuals to contribute to economic activities that benefit society.