A job used 72 equipment hours at an internal allocation rate of $18 per hour. What equipment cost should be charged to the job?
Correct Answer
D) $1,296.
Equipment allocation is 72 hours x $18 per hour = $1,296.
Why This Is the Correct Answer
Equipment allocation is 72 hours x $18 per hour = $1,296.
Why the Other Options Are Wrong
Option A: $12,960.
$12,960 misplaces the decimal point, giving ten times the correct amount. The correct calculation is 72 x 18 = 1,296.
Option B: $130.
$130 misplaces the decimal point, giving one tenth of the correct amount. The correct calculation is 72 x 18 = 1,296.
Option C: $90.
$90 adds 72 and 18 instead of multiplying. The correct calculation is 72 x 18 = 1,296.
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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