Which statement concerning common or separable costs is NOT correct?
A) Common costs are related to overhead expenses.
B) A product category with a profit after reflecting its separable costs contributes to the firm's overhead costs.
C) Common costs are typically allocated.
D) Common costs can be eliminated if a category is discontinued.

Question

Quizplus · Accepted Answer

Common costs are shared expenses that do not disappear if a product category is discontinued. They are not directly attributable to any one segment, product, or service, and thus, cannot be eliminated by discontinuing a category.

Which Statement Concerning Common or Separable Costs Is NOT Correct