which of the following statements is true? a. Segment margin is greater than contribution margin. b. Common fixed expenses must be allocated to each segment. c. Contribution margin is equal to sales less all variable and direct fixed expenses of a segment. d. Segment margin is equal to contribution margin less direct and common fixed expenses. e. Segment margin is equal to contribution margin less direct fixed expenses.
Answer the following multiple choice questions and show your work for 8-11
8-7 In a segmented income statement, which of the following statements is true?
a. Segment margin is greater than contribution margin.
b. Common fixed expenses must be allocated to each segment.
c. Contribution margin is equal to sales less all variable and direct fixed expenses of a segment.
d. Segment margin is equal to contribution margin less direct and common fixed expenses.
e. Segment margin is equal to contribution margin less direct fixed expenses.
8-10 A segment could be which of the following?
a. Product
b. Customer type
c. Geographic region
d. All of these.
e. None of these.
8-14 In the keep-or-drop decision, the company will find which of the following income statement formats most useful?
a. A segmented income statement in the contribution margin format
b. A segmented income statement in the full costing format that is used for financial reporting
c. An overall income statement in the contribution margin format
d. An overall income statement in the full costing format that is used for financial reporting
e. Income statements are of no use in making this type of decision.
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