When a Segment of a Business Has Been Discontinued During

question 103

Multiple Choice

When a segment of a business has been discontinued during the year,the gain or loss on disposal should:

• A)Include operating losses of the current period up to the measurement date.
• B)Be net of applicable income taxes.
• C)Be reported as an infrequent item.
• D)Include operating losses during the phase-out period.

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Definitions:

Single Plantwide Factory Overhead Rate

A method of allocating total factory overhead to products based on a single rate, often using total direct labor hours or machine hours.

Plantwide Factory Overhead Rate

A single overhead absorption rate calculated by dividing total factory overheads by total machine hours or labor hours, applied uniformly across all products and services.

Machine Hours

A measure of the amount of time a machine is operated, used in costing and operational efficiency analysis.

Single Plantwide Factory Overhead Rate

A method of allocating manufacturing overhead costs uniformly across all units produced within a single factory.