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

question 187

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 Drilling for the current period is:

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

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Definitions:

Units

Measurements or quantities of a product or service.

Short-Run Costs

Costs that vary with the level of output in the short term, where at least one factor of production is fixed.

Profitable Level

The point at which a business or operation generates revenue that exceeds its costs, leading to profitability.

Given Price

A specific price point that is set or assumed within a particular context, often used as a reference in economic analysis.