What Might Explain Why Some Managers Advocate Fully Allocating All

question 120

Multiple Choice

What might explain why some managers advocate fully allocating all costs, including corporate costs to distribution channels and to customers?

• A) all costs are incurred to support sales of products to customers
• B) division managers can influence and control corporate costs
• C) distribution channel managers can control corporate costs
• D) all costs need to be considered to conduct adequate variance analysis

---

Definitions:

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders instead of paying a cash dividend.

Stockholders' Equity

Stockholders' equity represents the ownership interest of shareholders in the corporation, calculated as total assets minus total liabilities.

Liabilities

Financial obligations or debts that a company owes to external parties.

Cash Dividend

A cash dividend is a payment made by a company out of its earnings to shareholders in the form of cash.