A company manufactures household furniture at several different plants.When preparing segmented income statements for each plant,unallocated costs do NOT include ________.
A) Salaries of attorneys at corporate office
B) Salaries of human resources staff at corporate office
C) Advertising initiated at corporate office
D) Depreciation expense on testing equipment in plant

Question

Quizplus · Accepted Answer

Unallocated costs refer to expenses that cannot be directly attributed to a specific plant or product line. Salaries of corporate office staff and advertising initiated at corporate office are examples of unallocated costs. However, depreciation expense on testing equipment in a plant is a direct cost of that specific plant and should be allocated to that plant.

A Company Manufactures Household Furniture at Several Different Plants