Answer the Following Questions Using the Information Below

question 129

Multiple Choice

Answer the following questions using the information below:
The Salmon Bay Corporation currently uses a manufacturing facility costing $200,000 per year; 80% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 20% of the facility and increase the overall costs of maintaining the space by 5%.
-If the stand-alone method were used, what amount of cost would be allocated to the start-up business?

• A)$40,000
• B)$50,000
• C)$40,000.
• D)$42,000

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