In Deciding Whether to Eliminate a Segment of a Business

question 84

Essay

In deciding whether to eliminate a segment of a business, an important issue is the identification of common costs.Answer the following questions relating to common costs.
a.What is a common fixed cost?
b.Is a common fixed cost considered relevant?
c.Give two examples of common fixed costs.
d.What happens to common fixed costs if a segment is eliminated?

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Definitions:

Class Action

A class action is a lawsuit filed by one or more plaintiffs on behalf of a larger group of people who are similarly affected, to address issues common to the entire class.

Physical Presence

The actual, bodily existence of a person or entity in a specific location at a given time.

Internet Sales

Refers to the process of buying and selling goods or services using the internet as the main medium of commerce.

State Taxes

Taxes imposed by individual U.S. states on income, property, sales, or other activities within their jurisdiction.