All of the Following Are Methods Used to Allocate Indirect

question 54

Multiple Choice

All of the following are methods used to allocate indirect costs in a marketing cost analysis,EXCEPT:

• A)divide cost equally across all territories.
• B)allocate cost in proportion to sales volume obtained from each territory.
• C)allocate 100% of the cost to the largest territory.
• D)allocate cost in same proportion as total direct costs of each territory.
• E)All of these are methods commonly used.

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Definitions:

Accord And Satisfaction

An arrangement between contracting parties whereby one of the parties substitutes a different performance for his or her original duty under the contract. The promise to perform the new duty is the accord, and the actual performance of that new duty is the satisfaction.

Liquidated Debt

Debt for which there is no dispute between the parties about the fact that money is owed and the amount of money owed.

Valid Consideration

Something of value (cash, services, goods, etc.) that is exchanged between parties in a contract, making the contract legally binding.

Preexisting Duty Rule

in contract law, states that an agreement to perform an act already legally obligated to is not sufficient consideration for a new promise.