Cost Allocation of Shared Facilities Cost Is Intended to Remind

question 135

Multiple Choice

Cost allocation of shared facilities cost is intended to remind managers of:

• A) The cost of using a shared resource.
• B) Both the cost and value of using shared resources.
• C) How much capacity a firm has.
• D) Why the firm invests in these facilities.

---

Definitions:

EBIT

Stands for Earnings Before Interest and Taxes; it's a financial metric that calculates a company's profitability by excluding interest and income tax expenses.

Debt

Money that is owed or due to be paid to someone else, often as a result of borrowing funds or purchasing goods and services on credit.

Fixed Costs

These are expenses that do not change with the level of goods or services produced by the business within a certain range of activity or over a certain period.

Break-Even

The point at which total costs and total revenues are equal, leading to no net loss or gain.