The owner of a convenience shop is considering adding a take-out sandwich section to her offerings.The new activity will occupy 25% of the space and account for 30% of total revenues.Property insurance on the building is $9000 per year and will not change because of the new activity.How much of the insurance premium should be allocated to the new product line?
A)$2700
B)$2475
C)$2250
D)$0.00

Question

Quizplus · Accepted Answer

The insurance premium should not be allocated based on the new activity since it remains unchanged regardless of the addition of the take-out sandwich section.

The Owner of a Convenience Shop Is Considering Adding a Take-Out