Pride Company Is Preparing a Segmented Income Statement, Subdivided into Departments

question 47

Multiple Choice

Pride Company is preparing a segmented income statement, subdivided into departments (billing, purchasing, and telemarketing) . Which of the following choices correctly describes the accounting treatment of the firm's compensation cost for key executives (president and vice-presidents) ?

• A) The cost is charged to the departments.
• B) The cost is not charged to the departments because, although easily traceable to the departments, it is not controllable at the departmental level.
• C) The cost is not charged to the departments because, although controllable at the departmental level, it is not easily traceable to the departments.
• D) The cost is not charged to the departments because it is both easily traceable to the departments and controllable by the departments.
• E) The cost is not charged to the departments because it is neither easily traceable to the departments nor controllable by the departments.

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Definitions:

Hostile Behaviors

Actions or attitudes that are aggressive, antagonistic, or intended to harm or show opposition.

Unrealistic Performance

Expectations or goals that are not achievable given current circumstances or abilities.

Immediate Imitation

entails copying someone's behavior or actions instantly upon observation, without any delay or consideration.

Self-Esteem

An individual's subjective evaluation of their own worth, encompassing beliefs about oneself as well as emotional states such as triumph, despair, pride, and shame.