Segment Margin Income Statements Are Most Useful to Managers When

question 187

Multiple Choice

Segment margin income statements are most useful to managers when they are prepared

• A)on a cash basis.
• B)using a segment contribution margin basis.
• C)on a GAAP basis.
• D)based on function.

---

Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of materials, labor, or overhead costs in terms of fully completed units of production during a specific time period.

First-In, First-Out

An inventory valuation method where the first items placed in inventory are the first sold.

Direct Materials

Direct materials are raw materials that are directly used in the manufacturing of a product and are easily traceable to the product being manufactured.

Work In Process Inventory

The cost of unfinished goods in the production process, including labor, raw materials, and overhead.