Managers Will Often Allocate Common Fixed Expenses to Business Segments

question 17

Multiple Choice

Managers will often allocate common fixed expenses to business segments because:

• A)this is required by law.
• B)not allocating these costs will lead to bad decisions.
• C)they believe this practice will ensure that the company's common fixed expenses are covered.
• D)they do not want the sum of the business segment margins to equal the net operating income for the company.

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Definitions:

Business Ethics

A process or theory in which companies are expected to conduct their business in an open and honest way to gain market acceptance and build a solid reputation.

Global Compact

A United Nations initiative to encourage businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation.

Non-Profit Organization

An organization dedicated to furthering a particular social cause or advocating for a shared point of view, typically exempt from paying income tax.

Public Relations

The act of engaging in strategic dialogue to build beneficial partnerships between companies and their public constituencies.