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Your company is considering an expansion project. Overhead is allocated at 1% of sales from headquarters. The expansion is expected to increase total firm
Your company is considering an expansion project. Overhead is allocated at 1% of sales from headquarters. The expansion is expected to increase total firm level overhead expense by $12,000 per year. How should the overhead expense be treated in the analysis of the project? Select one: O a. use the smaller of the 1% allocated and the expected increase in overhead expense of $12,000 O b. use the allocated 1% of sales for overhead expense O c. ignore the overhead expense O d. use the expected increase in overhead expense of $12,000 O e. combine the 1% allocated and the expected increase in overhead expense of $12,000 O f. use the greater of the 1% allocated and the expected increase in overhead expense of $12,000
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