Tanner Company Identified Three Operating Segments by Analyzing Its Types

question 64

Multiple Choice

Tanner Company identified three operating segments by analyzing its types of products produced.Information related to those segments for 2010 is presented below: $\begin{array}{lrr}&\text { Revenues } & \text { Expenses } & \text { Common Expenses }\\\hline\text { Segment A } & \$ 400,000 & \$ 300,000 \\\text { Segment B } & 250,000 & 100,000 \\\text { Segment C } & 350,000 & 200,000 \\\text { Total }&\$1,000,000&\$600,000&\$200,000\end{array}$ For measurement purposes, Tanner typically allocates common expenses to segments based on the ratio of a segment's profit before common expenses to total profit before common expenses.As this allocation method reasonably allocates common expenses to segments, Segment A's operating profit for segment reporting purposes would be

• A)$ 0
• B)$ 50, 000
• C)$ 75, 000
• D)$100, 000

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Definitions:

Assumption of Risk

A legal principle under which an individual acknowledges and accepts the risks associated with an activity, possibly diminishing their right to claim damages.

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related to horse riding or the skills associated with riding, training, and handling horses.

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A principle of law that allocates damages based on the degree of fault of each party involved in an accident.

Good Samaritan Statute

A statute that exempts from liability a person, such as a physician passerby, who voluntarily renders aid to an injured person but negligently, but not unreasonably negligently, causes injury while rendering the aid.