Answer the Following Question(s)using the Information Below

question 112

Multiple Choice

Answer the following question(s) using the information below:
The Sturgeon Bay Corporation currently uses a manufacturing facility costing $400,000 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 incremental method were used, what amount of cost would be allocated to the start-up business?

• A)$20,000
• B)$100,000
• C)$80,000
• D)$84,000
• E)$21,000

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