Allocating division-sustaining costs to distribution channels exaggerates the potential cost savings from discontinuing a distribution channel.

Question

Quizplus · Accepted Answer

Allocating division-sustaining costs to distribution channels can make it seem like discontinuing a channel would result in larger cost savings than it actually would, as those costs would still need to be covered even if the channel was eliminated.

Allocating Division-Sustaining Costs to Distribution Channels Exaggerates the Potential Cost