Which of the following costs probably should not be allocated to the investment needed for a new project?
A) Project's required increase in accounts receivable
B) New warehouse, built for this project
C) A portion of the vice president's salary
D) Labor expense for employees involved in the project

Question

Quizplus · Accepted Answer

The vice president's salary is not directly related to the investment needed for the new project and should not be allocated as a cost for the project. The other costs listed (increase in accounts receivable, new warehouse, and labor expenses) are all directly related to the project and should be included in the project's investment cost.

Which of the Following Costs Probably Should Not Be Allocated