Answer:
ensures that all costs are covered
Explanation:
Common fixed expenses is support the operation of many segments. It is not visible in whole segment or in the part of any segment.
Allocating common fixed expenses to business segments may reason the managers to wrongly terminated business segments because it’s artificially increases each segment of break even point. Even after discontinuation of common fixed expenses, it will happen continuously.
So According to the analysis, option (C) is correct.
