What amount of cost would be allocated to the start-up


The Corporation currently uses a manufacturing facility costing $500,000 per year; 75% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 25% 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?

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Accounting Basics: What amount of cost would be allocated to the start-up
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