When a Department or Product Line Is Dropped, the Common

question 40

Multiple Choice

When a department or product line is dropped, the common fixed costs that had been allocated to that department

• A)are eliminated.
• B)become variable costs.
• C)are allocated to the remaining departments or product lines.
• D)become sunk costs.

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Definitions:

Location Difficulties

Challenges associated with the geographical positioning of a business that could impact its success or operations.

Economic Condition

The state of an economy at a given time, including factors like inflation, unemployment, and growth rates.

City

A large human settlement generally characterized by significant population density, economic activities, and a developed infrastructure.

State

Refers to a politically organized body of people under a single government, or a specific condition or mode of being.