Segment Data

question 162

Multiple Choice

Segment data

• A) can be used for vertical, but not horizontal analysis
• B) is gathered from invoices entered into the accounting system
• C) is only useful by product line
• D) analysis is required by GAAP

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent and salaries.

Variable Departmental Costs

Costs that vary directly with the level of output or activity within a specific department of a company.

Incremental Profit

The additional profit derived from making changes to the business operations, such as increasing production or sales.

Cash Payback Period

The duration of time it takes for an investment to generate enough cash flow to recover its initial cost.