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

question 64

Multiple Choice

Henry 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:

Salesperson

An individual who sells products or services to customers, aiming to meet or exceed sales targets.

Electronic Vending Machine

An automated machine that provides items such as snacks, beverages, and other products to consumers after money, a credit card, or a specially designed card is inserted into the machine.

No-need

The situation where a potential customer or market does not exhibit a demand or interest in a particular product or service.

Stalling Objection

A type of resistance or hesitation raised by a prospect in a sales situation, often indicating a delay in decision-making rather than outright refusal.