Finley Company has its company headquarters based in Raleigh, North Carolina, and has six individual retail stores spread throughout North Carolina and Virginia. Which of the following costs would most likely be treated as a common cost for segmented reporting purposes?
A) Lease costs for the company headquarters.
B) Property tax costs for the Virginia stores.
C) Direct labor costs for the North Carolina stores.
D) Utilities costs for the both the Virginia and North Carolina stores.

Question

Quizplus · Accepted Answer

Lease costs for the company headquarters would be a common cost for segmented reporting purposes because it is a cost that benefits all stores and cannot be traced to individual stores. Property tax costs for the Virginia stores, direct labor costs for the North Carolina stores, and utilities costs for both Virginia and North Carolina stores are all store-specific costs and would not be considered common costs for segmented reporting purposes.

Finley Company Has Its Company Headquarters Based in Raleigh, North