Final answer:
The statement in question is TRUE because fixed costs can be traceable to one business segment while also being common to another. An example is a facility manager's salary being traceable to the facility but common to multiple production lines within it.
Step-by-step explanation:
The statement that traceable fixed costs of one segment may be a common fixed cost of another segment is TRUE. Fixed costs are often thought of as 'overhead' costs that do not change with the level of production, such as rent on a factory, the cost of machinery, or research and development costs.
In certain circumstances, these costs can be directly associated with a particular segment of a business, making them traceable to that segment. However, that same cost can also benefit another segment, thus becoming a common fixed cost for the latter. For example, the manager's salary for an entire facility could be a traceable fixed cost to the facility but is also a common cost if the facility houses multiple production lines or segments.
When discussing the concept of spreading the overhead, it refers to the allocation of fixed costs over a larger number of units produced. This is visualized in the average fixed cost curve, which depicts average fixed costs (fixed cost divided by output quantity) declining as more units are produced. If the total fixed cost is $1,000, as output increases, the average fixed cost per unit falls because the same total cost is being spread over more units.