Which of the Following Is a Reason for Allocating Service

question 116

Multiple Choice

Which of the following is a reason for allocating service department costs and thereby motivating management?

• A)provides for cost recovery
• B)provides relevant information in determining corporate-wide profits generated by alternative actions
• C)meets regulations in some pricing instances
• D)reflects usage of services on a fair and equitable basis

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Definitions:

Elastic Segment

A portion of the demand curve where consumers are highly responsive to changes in price.

Inelastic Segment

A portion of the market where the demand for a product or service is relatively unresponsive to changes in price.

Barriers to Entry

Factors that prevent or hinder companies from entering a specific market or industry.

Monopoly Power

The significant control or exclusive possession of the market by a single entity, allowing it to influence price or terms of sale for goods and services.