When a department or product line is dropped, the common fixed costs that had been allocated to that department
A)are eliminated.
B)become variable costs.
C)are allocated to the remaining departments or product lines.
D)become sunk costs.

Question

Quizplus · Accepted Answer

When a department or product line is dropped, the common fixed costs that were previously allocated to it do not disappear; instead, they are typically redistributed among the remaining departments or product lines. These costs are not eliminated, do not become variable, nor do they become sunk costs in this context.

When a Department or Product Line Is Dropped, the Common