The most important reason cost allocation is an important strategic issue for U.S.manufacturing firms with foreign subsidiaries:
A)The tax implications.
B)Quality concerns.
C)Import restrictions.
D)Cultural differences.
E)The company's desire to grow.

Question

Quizplus · Accepted Answer

Cost allocation is directly linked to tax implications, as companies need to allocate costs properly to avoid tax penalties and optimize their tax planning strategies. This is particularly important for U.S. manufacturing firms with foreign subsidiaries, which may face complex tax regulations and international tax issues. By allocating costs effectively, these firms can enhance their financial performance and competitiveness in global markets. Therefore, cost allocation is a critical strategic issue for these companies, and they need to adopt sound methodologies and processes to manage it effectively.

The Most Important Reason Cost Allocation Is an Important Strategic