Answer the Following Questions Using the Information Below:
Fremantle Corporation

question 102

Multiple Choice

Answer the following questions using the information below:
Fremantle Corporation has two departments,Sails and Masts.Central costs could be allocated to the two departments in various ways.
$$\begin{array} { l r r } & \text { Sails Department } & \text { Masts Department } \\\text { Square metreage } & 6000 & 18000 \\\text { Number of employees } & 1120 & 480 \\\text { Sales } & \$ 400000 & \$ 2000000\end{array}$$
-If total payroll processing costs of $60 000 are allocated on the basis of number of employees,the amount allocated to the Masts Department would be:

• A)$45 000
• B)$18 000
• C)$42 000
• D)$50 000

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Definitions:

Consuming

Consuming involves using up goods or services by purchasing, eating, or utilizing them to satisfy needs or wants.

Good

A material item or service that satisfies a need or desire and is available for purchase or trade.

Demand-Side

Economic policies or concepts focused on increasing demand for goods and services as a way to stimulate economic growth.

Market Failures

Situations where the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.