The Guidelines to Determine That a Segment Is Reportable in Accordance

question 28

Multiple Choice

The guidelines to determine that a segment is reportable in accordance with AASB 8 Operating Segments includes:

• A) The segment's reported revenue, including external customers and intersegment sales or transfers, is 10 per cent or more of the combined revenue, internal and external, of all operating segments.
• B) The segment's reported profit or loss is 10 per cent or more of the greater, in absolute amount, of (i) the combined reported profit of all operating segments that did not report a loss and (ii) the combined reported loss of all operating segments that reported a loss.
• C) The segment's assets are 10 per cent or more of the combined assets of all operating segments.
• D) All of the given answers are correct.

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Definitions:

Direct Labor Hours

Direct labor hours are the total hours worked by employees directly involved in the production of goods or services.

Overhead Rate

The rate at which indirect costs are allocated to produced goods or services.

Direct Labor Dollar

The total cost of wages paid to workers who are directly involved in the production of goods or delivery of services.

Rent Expense

The cost incurred for leasing or renting property or equipment, considered an operating expense in accounting.