As part of its expansion project, A.J. Industries Equipment Division has expanded its office space
by 200 square feet. The company's administrative overhead is allocated based on the square footage
of each business segment.
Although the total administrative overhead for the company will remain
the same, the Equipment Division will be charged more for administrative overhead. For the
Equipment Division expansion project, the administrative overhead is an example of a(n)
A) sunk cost. B) opportunity cost.
C) incremental opportunity cash flow. D) incremental cash flow.
A
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Which of the following, if true, weakens the CEO's case for outsourcing to Latin America?
A) Latin America has rapidly growing markets in consumer products. B) Labor conditions in Latin America are volatile. C) Latin American countries have mostly friendly relations with one another. D) Companies in Latin America are quite knowledgeable about American business culture. E) Latin American workers are willing to work longer hours than many American workers.
A responsibility center for which separate measures of revenues and costs are obtained is called a(n) ________
A) cost center B) contribution center C) contribution margin center D) segment