Use the Following Information to Answer the Following Questions

question 55

Multiple Choice

Use the following information to answer the following Questions
The following information was taken from the segmented income statement of Restin, Inc., and the company's three divisions:

In addition, the company incurred common fixed costs of $18,000.
-Assuming use of a responsibility accounting system, which of the following amounts should be used to evaluate the performance of the Los Angeles division manager?

• A) $4,000.
• B) $8,000.
• C) $10,000.
• D) $25,000.
• E) $90,000.

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Definitions:

Disposal

The act of getting rid of an asset through sale, exchange, retirement, or destruction.

Accounting Equation

The fundamental principle of double-entry bookkeeping: Assets = Liabilities + Equity, depicting the relationship between a company's resources and claims on those resources.

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase cost.

Cash-Equivalent Value

The value of an asset that is easily convertible into a known amount of cash with minimal risk of change in value.