Annual equipment ownership cost is $42,000 and expected annual use is 1,400 hours. What hourly ownership cost should be allocated?
Correct Answer
C) $30.
Hourly ownership cost is $42,000 / 1,400 hours = $30 per hour.
Why This Is the Correct Answer
Hourly ownership cost is $42,000 / 1,400 hours = $30 per hour.
Why the Other Options Are Wrong
Option A: $24.
$24. is below the supported result for equipment allocation; it likely skips a premium-pay or employer-cost component.
Option B: $28.
$28. is below the supported result for equipment allocation; it likely skips a premium-pay or employer-cost component.
Option D: $34.
$34. is above the supported result for equipment allocation; it likely pays the wrong premium tier or counts the same hours twice.
Memory Technique
Who controlled hourly, who paid ownership, where is the Allocating Cost record?
Reference Hint
Study anchor (closed-book): memorize Equipment allocation from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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