When You Enter a Purchase and Have Allowed Allocation for All

question 11

Multiple Choice

When you enter a purchase and have allowed allocation for all expense and revenue accounts -

• A)cost of goods sold will be correctly allocated automatically
• B)freight expenses may not be allocated
• C)variance costs may not be allocated
• D)all expense accounts will be correctly allocated if you enter the allocation details

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Definitions:

Minimum Required Return

The smallest return on investment that an investor is willing to accept, considering the risk associated with the investment.

Cost Center

A department or segment within a company where costs can be allocated, but that does not directly contribute to profit, primarily used for budgeting and control purposes.

Investment Center

A business unit or division that is responsible for its own revenues, expenses, assets, and returns, and is evaluated on its profitability and efficiency in using its assets.

Profit Center

A department or unit within an organization that is responsible for generating revenue and is evaluated based on its profitability.