What Would Be a Good Example of a Common Cost

question 111

Multiple Choice

What would be a good example of a common cost that normally could NOT be assigned to products on a segmented income statement except on an arbitrary basis?

• A) Product advertising outlays.
• B) Salary of a corporation president.
• C) Direct materials.
• D) The product manager's salary.

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Definitions:

Indenture

A formal legal agreement between a bond issuer and the bondholders, detailing the terms of the bond.

Covenants

Agreements or promises in a financial contract that certain activities will or will not be undertaken.

Dedicated Capital

Funds allocated specifically for a particular investment or project within a company.