The Biggest Problem with Allocating Indirect Expenses to Segments Is

question 32

Multiple Choice

The biggest problem with allocating indirect expenses to segments is that:

• A)Allocations can be somewhat arbitrary and the results can vary widely
• B)Some departments consume more indirect expenses
• C)Fixed costs are ignored
• D)It is a time-consuming exercise

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Definitions:

Investment

Investment involves allocating resources, usually money, with the expectation of earning an income or profit over time.

Days

Units of time measurement equating to approximately 24 hours, representing the approximate period of the Earth's rotation on its axis.

Grow

An increase in size, number, value, or strength over a period of time.

Borrowed

The act of receiving something of value in exchange for the promise of returning it or its equivalent.