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Home Q & A Board Other Fields Homework Help Business Accounting
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Passa Caglia Passa Caglia
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A month ago
In deciding whether to eliminate a segment of a business, an important issue is the identification of common costs. Answer the following questions relating to common costs.
a.What is a common fixed cost?
b.Is a common fixed cost considered relevant?
c.Give two examples of common fixed costs.
d.What happens to common fixed costs if a segment is eliminated?
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Managerial Accounting

Managerial Accounting


Edition: 4th
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elacevedoelacevedo
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a.A common cost is a cost that is not directly caused by the cost object (or segment).
That is, it may be an allocated fixed cost incurred at the corporate level for the benefit of the entire organization.
b.A common cost is a non-differential cost, and thus it is not a relevant cost.
c.Some common fixed costs include supervisory salaries, executive salaries, and
headquarter costs such as utilities and accounting.
d.If a segment is eliminated, the common fixed costs are absorbed by the other
segments.
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Passa Caglia Author
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A month ago
Thanks for your help!!
jamiebonf99
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Yesterday
I appreciate what you did here, answered it right Smiling Face with Open Mouth
DragonHeart
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2 hours ago
Thanks
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