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The TSLA 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 stand-alone method were used to allocate the common cost, what amount of cost would be allocated to the TSLA Corporation? Ⓒ$320,000 O $84,000 O $336,000 O $400,000

The TSLA 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 stand-alone method were used to allocate the common cost, what amount of cost would be allocated to the TSLA Corporation? Ⓒ$320,000 O $84,000 O $336,000 O $400,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The TSLA 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 stand-alone method were used to allocate the common cost, what amount of cost would be allocated to the TSLA Corporation? O $320,000 O $84,000 O $336,000 O $400,000
Transcribed Image Text:The TSLA 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 stand-alone method were used to allocate the common cost, what amount of cost would be allocated to the TSLA Corporation? O $320,000 O $84,000 O $336,000 O $400,000
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