Which of the following costs probably should not be allocated to the investment needed for a new project?
A)Increase in accounts receivable
B)New warehouse, built for this project
C)25 percent of the vice president's salary
D)Labour expense for employees in new warehouse

Question

Quizplus · Accepted Answer

The vice president's salary is likely a fixed overhead cost that would be incurred regardless of the new project, so it should not be allocated to the investment needed for the new project.

Which of the Following Costs Probably Should Not Be Allocated