The TSLA Corporation currently uses a manufacturing facility costing $400,000 per year: 80% of the facility's...

 

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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? If the incremental method were used to allocate the common cost, what amount of cost would be allocated to the start-up business? 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? If the incremental method were used to allocate the common cost, what amount of cost would be allocated to the start-up business?

Answer rating: 100% (QA)

To calculate the cost allocation using the standalone method and the incremental method we need to c... View the full answer