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:

Cost of Debt

The effective rate that a company pays on its total debt, factoring in interest payments, fees, and other costs associated with borrowing.

Stock Price

The cost of purchasing a share of a company's stock, reflecting what investors are willing to pay based on their expectations of future company performance.

Personal Taxes

Taxes levied on individuals or households based on their income, property, and consumption, which contribute to federal, state, or municipal revenues.

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutional investors, which must be repaid at a future date, typically with interest.