If a Facility Has Costs of $100,000 Per Year and 20,000

Multiple Choice

If a facility has costs of $100,000 per year and 20,000 square metres,and if 19,000 square metres are absorbed by the value streams,what happens to the unabsorbed cost of the remaining 1,000 metres?

A) The cost is allocated to all the value streams based on proportionate square foot usage.
B) The cost is assigned to all value streams equally.
C) The cost is absorbed by the largest value stream.
D) The cost is deducted from revenue as a separate item.