A Segment Is Considered to Be Significant If Its

question 21

Multiple Choice

A segment is considered to be significant if its:

• A) reported profit is at least 10% of the combined profit of all operating segments.
• B) reported profit (loss) is at least 10% of the combined reported profit of all operating segments not reporting a loss.
• C) reported profit (loss) is at least 10% of the combined reported loss of all operating segments that reported a loss.
• D) reported profit (loss) is at least 10% of the combined reported profit of all operating segments not reporting a loss; and reported profit (loss) is at least 10% of the combined reported loss of all operating segments that reported a loss.

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Definitions:

Economic Profits

Profits calculated by subtracting both explicit and implicit costs from total revenues, representing the additional income earned over and above the opportunity costs.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which each seller offers an identical product.

Market Price

Market price is the current price at which an asset or service can be bought or sold in a given market.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit changes as more units are produced.