Answer the Following Questions Using the Information Below

Multiple Choice

Answer the following questions using the information below:
The Salmon Bay Corporation currently uses a manufacturing facility costing $200,000 per year; 80% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 20% 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?

A) $40,000
B) $50,000
C) $40,000.
D) $42,000