Which Purpose of Cost Allocation Is Used to Encourage Sales

question 12

Multiple Choice

Which purpose of cost allocation is used to encourage sales representatives to push high-margin products or services?

• A)to provide information for economic decisions
• B)to motivate managers and other employees
• C)to justify costs
• D)to measure income and assets for reporting to external parties
• E)to compute reimbursement

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Definitions:

Accounting Period

A specific period of time used for financial reporting, often a quarter or year, during which financial information is recorded and reported.

Debit

An entry recorded on the left side of an account ledger, representing an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Credit

An accounting entry that increases a liability or equity account or decreases an asset or expense account.

Balance Sheet Accounts

Accounts that reflect the assets, liabilities, and shareholders' equity of a company at a particular point in time.