Which of the following should not influence a manager's decision in deciding whether or not to close a division?
A)Qualitative factors
B)Allocated fixed costs
C)Allocated product costs
D)Allocated variable selling expenses

Question

Quizplus · Accepted Answer

Allocated fixed costs should not influence a manager's decision in deciding whether or not to close a division because they are not relevant to the decision. This is because allocated fixed costs cannot be avoided even if the division is closed, so they do not represent a cost savings or cost incurred by keeping the division open. Qualitative factors, allocated product costs, and allocated variable selling expenses are all relevant factors that should be considered when making the decision.

Which of the Following Should Not Influence a Manager's Decision