Consider the Following Statements: I

question 152

Multiple Choice

Consider the following statements: I. A division's net operating income, after deducting both traceable and allocated common fixed costs, is negative.
II) The division's avoidable fixed costs exceed its contribution margin.
III) The division's traceable fixed costs plus its allocated common corporate costs exceed its contribution margin.
Which of the above statements is a valid reason for eliminating the division?

• A)Only I
• B)Only II
• C)Only III
• D)Only I and II

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Definitions:

Set Point

A normal condition maintained by homeostatic mechanisms.

Steady State

A condition where the variables (such as concentration of substances) in a system remain constant over time despite ongoing processes that attempt to change them.

Homeostatic Response

The process by which organisms regulate internal conditions, such as temperature and pH, to maintain a stable internal environment.

Set Point

The target value that a system regulates towards, such as the human body's regulation of temperature or glucose levels.