A multi-unit retailer seeks to determine the profitability of a number of stores located in the Northeast.In calculating expenses by geographic area,the firm does not have to allocate which expenses?
A) direct costs
B) opportunity costs
C) natural account expenses
D) variable costs

Question

Quizplus · Accepted Answer

Direct costs are those that can be specifically attributed to a particular store or location, and do not need to be allocated among multiple stores. Therefore, in calculating expenses by geographic area, the firm does not have to allocate direct costs. On the other hand, opportunity costs, natural account expenses, and variable costs may need to be allocated among multiple stores or locations, as they are not specific to one store or location.

A Multi-Unit Retailer Seeks to Determine the Profitability of a Number