The Biggest Problem with Allocating Indirect Expenses to Segments Is

question 46

Multiple Choice

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

• A) fixed costs are ignored.
• B) it is a time-consuming exercise.
• C) allocations can be somewhat arbitrary and the results can vary widely.
• D) some departments consume more indirect expenses.

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Definitions:

Communicate

The act of conveying information or expressing ideas and feelings through verbal or nonverbal means.

Segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors who might require separate products or marketing strategies.

Psychographics

The study and classification of people according to their attitudes, aspirations, and other psychological criteria, especially in market research.