Answer the following questions using the information below:
The Hassan Corporation has an Electric Mixer Division and an Electric Lamp Division. Of a $10,000,000 bond issuance, the Electric Mixer Division used $7,000,000 and the Electric Lamp Division used $3,000,000 for expansion. Interest costs on the bond totaled $750,000 for the year.
-Which corporate costs should be allocated to divisions?
A)fixed costs only
B)variable costs only
C)neither fixed nor variable costs
D)both fixed and variable costs

Question

Quizplus · Accepted Answer

Both fixed and variable costs should be allocated to divisions, as this will allow for accurate cost analysis and better decision-making. The interest costs on the bond are an example of a fixed cost that should be allocated to the divisions based on their respective use of the funds.

Answer the Following Questions Using the Information Below