When a department or product line is dropped, the common fixed costs which had been allocated to that department:
A) are eliminated.
B) become variable costs.
C) are allocated to the remaining departments or product lines.
D) become sunk costs.

Question

Quizplus · Accepted Answer

Common fixed costs are not eliminated when a department is dropped; instead, they are reallocated to the remaining departments or product lines.

When a Department or Product Line Is Dropped, the Common