Henry Company Is Preparing a Segmented Income Statement, Subdivided into Departments

question 64

Multiple Choice

Henry Company is preparing a segmented income statement, subdivided into departments (billing, purchasing, and telemarketing) . Which of the following choices correctly describes the accounting treatment of the firm's compensation cost for key executives (president and vice-presidents) ?

• A) The cost is charged to the departments.
• B) The cost is not charged to the departments because, although easily traceable to the departments, it is not controllable at the departmental level.
• C) The cost is not charged to the departments because, although controllable at the departmental level, it is not easily traceable to the departments.
• D) The cost is not charged to the departments because it is both easily traceable to the departments and controllable by the departments.
• E) The cost is not charged to the departments because it is neither easily traceable to the departments nor controllable by the departments.

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Definitions:

Radical Behaviorism

A philosophy of the science of behavior emphasizing the study of observable behavior and the role of the environment as a determinant of behavior.

Motivates

The underlying drives, desires, or needs that propel individuals to act in certain ways or pursue particular goals.

Radical Behaviorism

An approach to psychology that treats observable behavior as the primary subject matter of psychology and emphasizes the environment's role in shaping behavior through reinforcement.

Bandura's Concept

Bandura's Concept revolves around the theory of social learning, emphasizing the importance of observational learning, imitation, and modeling in acquiring new behaviors.