Which of the Following Statements Is True Regarding the Allocation

question 25

Multiple Choice

Which of the following statements is true regarding the allocation of a company's indirect fixed costs?

• A) Indirect fixed costs should always be traced to a particular segment.
• B) If the indirect fixed cost would go away should a particular segment be eliminated, then the indirect fixed cost should be traced to that particular segment.
• C) Indirect fixed costs should never be allocated to a particular segment.
• D) Indirect fixed costs should not benefit more than one particular segment.

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Definitions:

Merchant

A business or individual engaged in commercial trade or sales.

Article 2

A reference that could pertain to various legal documents; often associated with the Uniform Commercial Code in the United States, which governs sales of goods.

Reasonable Price

A price that is fair and sensible for the goods or services provided, often considered in legal and economic contexts.

Common Law

A legal system based on judicial decisions and precedent, rather than statutory laws.