Corporate-sustaining costs should be allocated to ________.
A) motivate changes in customer behavior
B) evaluate distribution-channel managers
C) determine the selling price that will cover all costs
D) find the cause-and-effect relationship

Question

Quizplus · Accepted Answer

Corporate-sustaining costs are overhead costs that are not directly related to producing a specific product or providing a particular service. They include expenses such as executive salaries, office rent, and administrative costs. These costs should be allocated to determine the selling price that will cover all costs, so the company can make a profit. This will help the company to stay in business and continue to serve its customers. It is not appropriate to allocate these costs to motivate changes in customer behavior, evaluate distribution-channel managers, or find the cause-and-effect relationship.

Corporate-Sustaining Costs Should Be Allocated to ________